German banks are to be allowed to handle cryptocurrency transactions and custody as of January 1, 2020. The draft was passed by parliament on November 29 and subsequently approved by the upper house.
Banks in Germany are currently prohibited from facilitating their clients’ dealings in Bitcoin or other crypto. Supporters of the proposed law, which is now set to come into force in 2020, have hailed it as a step toward turning Europe’s economic powerhouse into a major driver of cryptocurrency adoption.
The Association of German Banks, a financial industry lobbying group representing the interests of more than 200 banks, supports the proposal. It said in a statement, “Banks in particular are experienced in the custody of client assets and in risk management, are committed to investor protection and have always been monitored by the financial supervisory authorities.”* This comes after the group published a paper in October calling for the creation of a blockchain-based digital euro backed by the European Central Bank.
Lawmakers in Germany remain wary of cryptocurrency. Parliament, or Bundestag, recently issued a statement to the effect that Bitcoin and Co. are not “real money,” warning of volatility and difficulty in making crypto payments.
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