A bill approved by the Bundestag enables German banks to offer bitcoin and cryptocurrency services.
This is a new Money Laundering Act, which brings German legislation into line with the EU’s Fourth Anti-Money Laundering Directive and will have to be approved by the Länder.
According to the German newspaper Handelsblatt, this new law will allow banks in Germany, to offer and store cryptocurrencies, for example.
If passed, it would enter into force as early as 2020, effectively opening the door to a new business area for banks.
Until now, banks were expressly prohibited from offering virtual asset services to their customers, but the new law removes this ban.
In fact, so far the German regulations provided that crypto services should not be offered by legal entities which provide regulated banking services: indeed, banks that want to do so must resort to external providers or special branches.
From 2020 this will no longer be necessary, which means that financial institutions will finally be able to offer their customers online banking services directly, including cryptocurrencies.
The new regulation also introduces the legal definition of “cryptographic values”, defined as “digital representations of a value that has not been issued by any central bank or public agency”, but is “accepted as a means of exchange and payment or for investment purposes”.
The Association of German Banks, which has already expressed its views on digital currencies in the past, has welcomed the new regulation, stating that credit institutions already have experience in the custody of client assets and risk management. They are also committed to investor protection and supervised by financial supervision.
They could thus effectively prevent the use of cryptocurrencies for money laundering and terrorist financing and allow investors to operate within a fully regulated framework.
However, some people are critical of the initiative. In particular, doubts have been raised about a hypothetical increase in the aggressiveness of the commercial offers of the banks themselves, in view of the possibility of increasing their business through the provision of crypto services.
Some even go so far as to assume that this could compromise consumer protection, due to the potential financial risks arising from investments in cryptocurrencies.
