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Germany Takes The Lead
While some countries continue to ban cryptocurrency, and others mock it, Germany has passed a law allowing banks to treat cryptocurrencies the same way they do stocks and bonds. Starting in 2020, they may market, sell, and hold digital money.
The new law relies on a 2015 money laundering directive made by the EU.
Fourth EU Money Laundering Directive
This rather lengthy directive was put into effect on May 20, 2015. It referred to the extremely negative effects of illicit money on the integrity, stability, and reputation of the financial sector of the European Union.
Money laundering and the financing of terrorism are frequently carried out in an international context. Large cash payments are highly vulnerable to such risks.
Digital money is increasingly substituted for fiat currency in bank accounts which justifies subjecting such assets to the same obligations as fiat money in regards to anti-money laundering and countering the financing of terrorism.
However, under strict conditions, member states of the EU should be permitted to exempt certain digital assets from certain customer due diligence measures. This excludes the monitoring of transactions or of business relationships.
The verbiage goes on, as most government directives do, but that’s the gist of this particular new law’s reliance.
The New German Bill
The bill has already been passed by the Bundestag, which is Germany’s federal parliament. It is expected to be signed off by the sixteen states of the nation.
The new bill would enable investors to further invest in cryptocurrency via German funds. They will not be forced to place their money in other countries.
DLC consultant, Sven Hildebrandt, was thrilled. He said Germany is well on its way to becoming a crypto-heaven, pioneering a role in the regulation of crypto assets.
German banking association BdB was also excited about the new legislation. It said, “Credit institutions are experienced in the safekeeping of client assets and in risk management, are dedicated to investor protection, and have always been controlled by the financial supervision.”
Banks would be able to prevent money laundering and terrorist funding with cryptocurrencies.
Some reporters are concerned that a threat to consumer protections may arise due to the new law.
A finance expert at the consumer center in Baden-Wuerttemberg, Niels Nauhauser, said that if banks are allowed to sell cryptocurrencies and keep them for a fee, they risk turning those assets at risk of total loss to their clients, who would not know what was going on.
My Humble Opinion
It’s nice that Germany is ready and willing to deal with crypto. However, the more that any government takes control of something, the less freedom there is for people to use it as they wish.
This does not mean I support terrorism. It means cryptocurrency was made by people to have an unbound way to buy and sell based on personal evaluation thereof.
Before we know it, developers and miners will have no authority over the value of their currencies. It will be as much under government control as fiat money.
What is your take on all this? Is Germany on the right track? Should other nations follow suit? How about all those naysayers who still want to call crypto a scam?
Leave your thoughts and questions in the comments below!