The Parliament of Germany has reportedly passed a bill across the country. The bill allows banks in Germany to store and sell cryptocurrencies from 2020. Moreover, the new legislation will come into being on the 1st of January 2020. With the help of the new regulation, the custody providers will merge with cryptocurrency exchanges, which are currently active in the country. Then they would take the necessary steps to make cryptocurrency operational in the country.
The banks, on the other hand, have to apply for a license in the country. By the looks of it, the law doesn’t just plan to put Germany as the fourth significant cryptocurrency in the world. Instead, Germany might become a leader when it comes to the adoption of cryptocurrencies. Germany is sending messages to the world as a whole about the milestone that Germany has acquired.
According to Sven Hildebrandt, partner at DLC, a prominent cryptocurrency consultancy, Germany is leading in cryptocurrency regulations. Further, this is making some of the institutional investors across the world to visit Germany & introduce a base of operation in Germany. Hildebrandt also said that Germany is on its way to become cryptocurrency heaven in the world as a whole.
Who has passed the new bill?
According to sources, the Bundestag, lower house located across the German Parliament has passed the bill at the beginning of November 2019. Later, the upper house, namely the Bundesrat, did approve the bill on the 29th of November 2019.
The bill had amended the clause in the EU’s Fourth Anti-Money Laundering Directive. The directive had been prohibiting banks from dealing with cryptocurrency directly. By the looks of it, it also allows them to legally selling & storing cryptocurrencies. The storing and selling will be done by the banks, the same way they have been doing with bonds and stocks. Banks in Germany can store and sell cryptocurrencies to retailers and significant institutional investors without a hassle.
Hildebrandt said that the cryptocurrency exchanges such as Kraken and Binance, alongside other custodians of digital assets, have to accumulate license from Bafin. Moreover, Bafin is the German regulator that allows cryptocurrency exchanges to operate in the country.
How can companies apply for the license?
At first, the companies would need a legal entity across German; however, the legal entity needs to have two distinctive directors to operate German by the 31st of December 2019. The companies would also have to provide a prearranged signal so that they could apply for a license to Bafin. Moreover, they have to do this before the 31st of March 2020. Lastly, the companies would need to apply before the 31st of November 2020.
The custodians with digital assets who are yet to establish legal identity across Germany will become illegal by the 2nd of January 2020. The companies have three options now if they want to continue business in Germany:
- The companies have to set up an authentic German company before 2020, and then they can apply for a license.
- The companies have to work alongside a custodian of cryptocurrency who has a license to operate in Germany.
- Lastly, they have to work side by side a licensed provider that would offer them a smart yet sophisticated solution.