Starting today, 4,000 German funds can invest in cryptocurrencies
The German law, which came into force on July 1, allows around 4,000 of the country’s so-called special funds to invest in cryptocurrencies, which may pave the way for an increase in German investors for electronic money.
4,000 German funds can invest in cryptocurrencies
According to the new regulations, German special funds may invest up to 20% of their portfolio in crypto currencies.
Today, the Fund Place Act comes into force in Germany, with which thousands of institutional funds can invest in Bitcoin and other crypto assets for the first time.
Specialty funds are popular with institutional investors, and the new law allows fund managers to allocate up to 20% of the special fund to crypto assets. Interest is skyrocketing, according to market experts who predict that new regulations could usher in significant investments in the crypto market.
Dominik Tyrybon, Associate at the Austrian law firm Schönherr Rechtsanwälte, predicted in May that the law would “certainly strengthen Germany’s position as a financial center” and “represent an important next step towards the legalization of cryptocurrencies as an asset” (in German) in the economy.
“Market experts had expected that the new regulation would open significant investments in the crypto market,” said Tyrybon.
The lawyer cited an estimate by Sven Hildebrandt, CEO of German sales company Ledger Consulting (DLC), who sees potential inflows of 350 billion euros (415 billion US dollars) into crypto assets.
Hidebrandt hailed the move as a big boost to Germany’s position as a financial investment hub, and experts believe it will boost the crypto industry as a whole by making more legal types of property.
“The inclusion of crypto assets in special funds is an important step towards their introduction,” the German MP Frank Schäffler told Decrypt in April when the law was passed by the Bundestag.
The Federal Association of Alternative Investments (BAI) has welcomed the new law. Now she is calling for it to be extended to include public funds.
Frank Dornseifer, Chairman of the Board of the Federal Association for Alternative Investments (BAI), is quoted by the local news site T3N.de as saying that the new rules apply not only to special funds, but also to a group of financial institutions, as they unnecessarily unite public funds Hold part of private capital.
And so, starting today – July 1st – 4000 German funds can invest in crypto currencies.
The Fund Location Act was drafted by the Federal Ministry of Finance and the Federal Ministry for Economic Affairs and Energy and administered by Olaf Scholz (SPD) and Peter Altmaier (CDU).
He added: “This is where the legislation is going in the right direction and we warmly welcome it.”
Enforcement of the law following the previous German decision to allow banks to sell and store cryptocurrencies from January 1, 2020. The move has sparked a number of partnerships between banks, German banks and crypto custody service providers.
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