Topic: New law enables german banks to sell and store cryptocurrencies in 2020 (Read 853 times)

They are slowly getting into the game, one step at a time. Their resistance are now gone. Well, there are still some negative statements against cryptocurrencies but this is just the last round of their fight for the old system. Deep within them they are aware that the world of finance will have to open up for new innovations.

Apparently the German government completely agrees with you on this one.

Imo, it's just a matter of time until every government will realize that it's disadvantageous, economically, to ignore cryptocurrencies any more. These currencies may not be perfect yet, because nothing is perfect in its early stage, but ignoring them is an economic suicide.

The most realistic approach is to cooperate. Because that's the situation. It is easy to oppose a new technology. Because in the early periods, their supporters are scarce. However, if something prohibited is beneficial, people's interest will increase. I think what needs to be done is to integrate it into the current economy.

I, too, am rather skeptical of similar news, all the same, banks are trying in tricky ways to curb cryptocurrency.
However, there is still a benefit, because cryptocurrency status is becoming increasingly legal, even if using similar methods.
One way or another, this increases the credibility of the general population.

Here lies my skepticism with that news. There is a snare to that move and shouldn't be taken on the face value that it's a plus for the Bitcoin community. Even the introduction of KYC by some crypto projects is already tying people to data and making a nonsense of the anonymity of Bitcoin.

Here lies my skepticism with that news. There is a snare to that move and shouldn't be taken on the face value that it's a plus for the Bitcoin community. Even the introduction of KYC by some crypto projects is already tying people to data and making a nonsense of the anonymity of Bitcoin.

Finally, people will carry out speculation and withdrawals in local currencies, which means that all crypto funds will be under central control, thus reviving those institutions.

you are right.. Smart Banks are those that follow developments like cryptocurrencies and not fight that. cryptocurrency is a very good innovation and safe for the future of humanity.  I really appreciate the steps that Germany will take against cryptocurrencies.

It’s smart for banks to want to join the cryptocurrency economy rather than fight it. It is inevitable that this is the direction that the people want and need to go.

Why do government always make a hard time for cryptocurrency fanatics and supporters? I think because ig is really a silent threat for government. A kind of threat that didn't bring harm to the citizens but preventinvg government to be corrupt. As soon as people embrace it no matter how many laws they will make for crypto banning, crypto will still arrive.

It had to happen. And there will be. Very soon the whole world will accept crypto currency. I know it will happen one day

If there is a real rise, it will be with such news. If the European banks support the cryptocurrency trade, the whole order will change. A new economic model emerges. I want to think that the new economy will be more transparent. This excitement shouldn't go to waste.

It’s smart for banks to want to join the cryptocurrency economy rather than fight it. It is inevitable that this is the direction that the people want and need to go.

In what way exactly? I haven't seen much from the crypto industry that makes governments lose out. ~

It depends on the country I guess. Germany has been far ahead of other countries in terms of crypto regulations, and as far as I have read into it, they seem friendly and open enough to allow crypto to gain more ground.

The thing however is that we need more countries like Germany being open to crypto. Everyone is looking at what the USA is doing in terms of regulations, but it seems that they are not as open minded as Germany is unfortunately.

Is this just sounds that bitcoin would be in control at some point?

Governments are literally making their way to have a spot in crypto currency huh.

But still this a good news, as it is a sign of government closely, little by little accepting crypto currency. However, on the other side it may come totally the opposite in a sense of blocking crypto currency.

Is this just sounds that bitcoin would be in control at some point? Governments are literally making their way to have a spot in crypto currency huh. But still this a good news, as it is a sign of government closely, little by little accepting crypto currency. However, on the other side it may come totally the opposite in a sense of blocking crypto currency.

It can be both, and I mean not only the USA and China, but other countries too. It is no secret that in many governments, if not in all of them, there are people who oppose the implementation of the laws which can make the utilization of cryptocurrencies easier. But I think that we are closer and closer to the point when such actions and/or laws do more harm to the countries than to cryptocurrencies.

But I think that we are closer and closer to the point when such actions and/or laws do more harm to the countries than to cryptocurrencies.

On daily basis, the users of crypto currencies are increasing which clearly shows that they are the future of the world. People even have started calling banks useless by the invention of crypto currencies. There are few countries which have realized the worth of cryptos timely and have made them legal. Sooner or later all states have to accept cryptos because public demand this. People find crypto great.

It can be both, and I mean not only the USA and China, but other countries too. It is no secret that in many governments, if not in all of them, there are people who oppose the implementation of the laws which can make the utilization of cryptocurrencies easier. But I think that we are closer and closer to the point when such actions and/or laws do more harm to the countries than to cryptocurrencies.

if Germany would do that, why is it so difficult to do in America and China, because they are in the first and second position of the economy?
what makes it difficult for them to implement it.
whether the rules are different, or the government deliberately prohibits it for a reason.

This is the best solution that been expected by many parties so far, in my opinion the current economic law is old-fashioned and indeed needs to be adapted to the current economic conditions that have been advanced and widely digitized. I believe the revision of the law will benefit many parties including policy makers such as the government and the state not only for user and the bank.

I always knew this was gonna happen but i am surprised it is happening so soon.

With the enactment of the anti-money laundering law in Germany, I feel that it benefits banks by preserving their interests, existence, and hegemony in the economy. Many people realize that the wave of blockchain and the era of digital currency is inevitable. From the business side, this regulation is very beneficial for the Bank because banks have a variety of forms of service which will certainly increase bank profitability.

Learn from the experience of several banks in Germany that went bankrupt due to money laundering scandals. Then bank officials need to ensure that their banks will not be used for money laundering. It is in their own interest not to be taken advantage of for money laundering or terrorist financing purposes - simply to avoid any damage to their reputation or to prevent significant financial losses which may also jeopardize a bank's very existence.

For the German government itself, this policy will spur the entry of revenues into Germany and spur German economic turnover which had slowed down due to the global economic downturn. The German economy has been supported by manufacturing exports, which have been affected by the weakening global economy.

With the certainty and legal umbrella for cryptocurrency trade in Germany, it is expected to be transmitted to many other countries. This policy can also be used as a pilot project for other countries which so far only wait and see become learn and action because in essence blockchain and cryptocurrency technology does offer many advantages.

I think that it is necessary to take into account the fact that Germany has political and economic weight in the European Union.  Countries such as France and Germany are the largest investors in the European Union and therefore no one dares to dictate terms for these countries.

I think that it is necessary to take into account the fact that Germany has political and economic weight in the European Union.  Countries such as France and Germany are the largest investors in the European Union and therefore no one dares to dictate terms for these countries.

That's fascinating, how they can make rules for you without being even in the Euro zone (from what I remember the UK kept the pound). I'm interested with how Germany would carry on with this, if it'll get struck down by EU or if indeed, there is already plan to change the law and Germany is just preparing for that in advance.

Not everyone in the EU is very happy, for example, Britain is attempting to exit a lot of the EU trade agreements since they are quite restrictive and you get basically controlled by the majority of people in the EU, although I do believe the overall rules from the big guys at the EU supersede all ruins made by local governments.

I really disagree with the commercial banks participating in this market. because transactions between wallets are out of control. Neither the central bank nor can it do that to commercial banks. If the banks are dishonest they will soon launder money in many ways and evade taxes. In my opinion this is one of the wrong decisions of the German government. What do you think ?

Let's hope most of the banks readily goes along accepting bitcoins and crypto for both deposit and withdrawals.

The beauty of bitcoin is that you can always hold a wallet on your own computer if you want.

I think this piece of regulation is about making it easier for businesses who which to move seamlessly from crypto to fiat and back to be able to do so without having to set up multiple accounts at multiple exchanges.

I am not entirely sure if I want the government to know how much money I have in my bitcoin account.
Now, as adoption it is great because it allows everyone to have a bit of bitcoin in their bank account which would make it very simple to get it, however for the ones that got into bitcoin way before it got this much attention, we got into it because we wanted politics out of finance.

Do you know what "having bitcoin in your bank account" means? That means people would be able to give the banks the right to have bitcoin in their systems, so they could basically once again have 1000 bitcoins as a whole bank but tell people they own 9000 bitcoins all because they think nobody will be cashing it out, there are more money on earth than there is cash all due to this problem.

I guess you misunderstood the idea of cryptocurrency banking. What banks will do is to sell and store cryptocurrency, meaning people will ask for them to keep their asset in form of cryptocurrency. You are wrong based on the examples you have given. First of all, you basically think of crypto banking acts like a physical exchange, it somehow does but the fact that it is regulated is so much more to compare with exchanges. Second, if people would need their money, they wouldn't be asking permission for the bank to sell it to another country, the bank itself has their money backed on the asset so it will be very a seamless transaction.

What germany did is a great move given the fact that they have a negative interest rate with their banks. This is beneficial, giving the option for cryptocurrency investment to get away with forceful spending of money by the banks.

I am very skeptical when I see traditional institutions entering the crypto field. Bitcoin was born with the aim of freeing itself from the power of central banks and states, not to give them an additional source of power.

#2  It could be a desperation move on the part of banks, many of which have poor financial stats and are in trouble.

I am very skeptical when I see traditional institutions entering the crypto field. Bitcoin was born with the aim of freeing itself from the power of central banks and states, not to give them an additional source of power.

Why did they bothered with it though? Since this is in Germany maybe they already know some push to change the EU laws regarding cryptos?

If I live there I'd probably use the service to get money from my bank account into crypto but I wouldn't keep the crypto in there. The point of having crypto is to have it as an alternate asset in case banks fail, keeping it in a bank is counterproductive.

#3  This could be 100% illegal. Laws made by the EU typically supersede laws made by native governments of EU states. This says the EU banned the practice:

There are really some rich people who prefer to have a good bank to be holding their Bitcoin, so they don't want to be victim of the hackers and commit possible mistakes that can delete their virtual assets. These people may not be millions but you don't need many people to make a viable business with this. Personally, I am taking this news as a positive one because this can directly affect the supply and demand of Bitcoin if there will be more bank customers who will opt to trust the bank they are loyal with to manage their possible digital holdings. Why many banks are also offering insurance and investment products? Because they have a large client base, and they know these people and their financial capabilities so it would be easier to reach and market to them, now the same thing can happen when they offer the Bitcoin and cryptocurrency option. This is part of the move to allow institutional money to be flowing to Bitcoin which can have a good impact on it especially long-term.

I really disagree with the commercial banks participating in this market. because transactions between wallets are out of control.

Neither the central bank nor can it do that to commercial banks

If the banks are dishonest they will soon launder money in many ways and evade taxes. In my opinion this is one of the wrong decisions of the German government. What do you think ?

Looks good, but would you want that? Most people who are in the Bitcoin space now wouldn't. That doesn't mean newcomers who trust banks aren't going to be interested, but for me doing it wouldn't have any benefits. Instead of you holding your coins I'd now have to ask my bank for permission just like with fiat money.

-Dear bank, I'd like to send my coins to another country, how much will it cost and when will you be able to realize the payment?

-Dear client, your tax returns aren't due, so we are freezing your bitcoins until we get a sign from your local tax office. Also, we are freezing some of your bitcoins permanently because because they come from silk road. Have a nice day.  

 

Looks good, but would you want that? Most people who are in the Bitcoin space now wouldn't. That doesn't mean newcomers who trust banks aren't going to be interested, but for me doing it wouldn't have any benefits. Instead of you holding your coins I'd now have to ask my bank for permission just like with fiat money.

-Dear bank, I'd like to send my coins to another country, how much will it cost and when will you be able to realize the payment?

-Dear client, your tax returns aren't due, so we are freezing your bitcoins until we get a sign from your local tax office. Also, we are freezing some of your bitcoins permanently because because they come from silk road. Have a nice day.  

 

This could be 100% illegal. Laws made by the EU typically supersede laws made by native governments of EU states. This says the EU banned the practice:

A new proposed bill on the European Union fourth Money Laundering Directive will allow banks to buy, hold and sell Bitcoin. The amendment on the directive comes to ease stringent rules that prohibited banks from either offering virtual asses or providing custody services. The move is an excellent relief for financial institutions in the region.

Taking advantage of the new bill is the German Bundestag, which has come up with a separate law to implement the move. Although the bill requires further development, it is expected to come into effect in 2020.

The legislation enables banks to sell and store cryptocurrencies from January 1, 2020. Other providers will now require a German license.

The German parliament today passed a bill allowing banks to sell and store cryptocurrencies from next year.

The new legislation will come into force on 1 January 2020, and will require current custody providers and crypto exchanges operating in the country to take steps, before the end of the year, to apply for a German license.  

The law will not only put Germany, the world’s fourth biggest economy, at the forefront of regulation in cryptocurrencies, but heralds a milestone in the adoption of cryptocurrencies.  

“Germany leads the way in crypto regulation, for sure. This leads to institutional investors coming to Germany, as they want security and regulation,” Sven Hildebrandt, partner at German crypto consultancy DLC, told Decrypt. "Germany is well on its way to becoming a crypto-heaven.”

The bill was passed by the Bundestag, the lower house of the German Parliament, earlier this month,  and approved by the upper house, the Bundesrat, today.

It amends a clause in the European Union’s Fourth Anti-Money Laundering Directive that currently prohibits banks from dealing directly in cryptocurrency. It  allows them to legally sell and store cryptocurrencies, just as they do stocks and bonds, to retail as well as institutional investors.

At the same time, exchanges such as Binance and Kraken, and other digital asset custodians, will need to obtain a license from the German regulator, Bafin, if they wish to continue operating in Germany, said Hildebrandt.

In order to apply for this, companies will need a German legal entity with two directors operating in the country by the end of 2019. They also need to signal their intention to apply to Bafin for a license before 31 March 2020, and submit the application prior to 31 November 2020.

Digital asset custodians who have not established a legal identity in Germany before the end of the year will be deemed illegal by 2 January 2020, said Hildebrandt.

He said this leaves companies wishing to continue provide services in Germany with three options: to set up a German company before the end of this year, and then apply for a licence; to work with a cryptocurrency custodian who is licensed in Germany, or to work with a licence provider, which can offer a “complex but clever" solution.

Companies have already begun to act on the new German law. Crypto Storage, a subsidiary of Swiss financial services provider, Crypto Finance announced plans to open an office in Frankfurt today.

Hildebrandt said that the new law will be a major breakthrough. “If you can hold [cryptocurrencies] in your bank account, that is massive for adoption,” he said. “I believe that this will act as a role model for all the other laws that will be coming into force Europe wide. Germany is driving crypto adoption forward and wants to play a leading role in Europe as well. One of the key challenges is keeping private keys safe.”

“I believe the biggest impact will be on exchanges such as BitStamp, Kraken and Binance, who are looking deeply into this,” he added.

The proposals were also greeted with enthusiasm by Germany’s banking community.

But consumer protection watchdogs have warned that it could mean banks could aggressively pitching cryptocurrencies to uneducated customers, putting them at risk.

https://decrypt.co/12603/new-law-makes-germany-crypto-heaven

It amends a clause in the European Union’s Fourth Anti-Money Laundering Directive that currently prohibits banks from dealing directly in cryptocurrency.