German banks will soon be able to sell and safe-keep cryptocurrencies under a new law, according to a report by German newspaper Handelsblatt.
Effective Jan. 1, 2020, the new legislation was passed by the German parliament on Nov. 29 as an amendment to the fourth EU Money Laundering Directive. According to the report, the bill originally required banks to store cryptocurrencies with third-party custodians. However, under the final version of the law, financial institutions can custody cryptocurrencies themselves after procuring proper licenses, and the deadline to apply for such licenses is also extended, per the report.
Sven Hildebrandt, a partner at Hamberg-based Distributed Ledger Consulting, praised the new law as a step for Germany "to becoming a crypto-heaven."
"The German legislator is playing a pioneering role in the regulation of crypto storage," Hildebrandt told Handelsblatt.
Some German industry experts are concerned with consumer protection under the new law. Handelsblatt cited financial expert Niels Nauhauser's worries that consumers may be allured by banks to invest in cryptocurrencies without understanding their risks and consequently losing their investments.
"So far, distribution was only possible for the banks through special bonds. Here, they had to inform their customers in advance about costs and key investor information. This is not the case in direct sales of bitcoin and co," Nauhauser told Handelsblatt.