Bitcoin News

Germany to allow funds to hold Crypto

Germany’s institutional funds will be permitted to hold up to 20 percent of their assets in cryptocurrencies starting on August 2, 2021, potentially paving the way for more mainstream adoption of Bitcoin (BTC) and other crypto assets by the country’s pension funds.

It has been reported by Bloomberg that a new law would change the set investment rules regulating Spezialfonds, commonly known as special funds, which are exclusively available to institutional investors such as pension funds and insurance companies.

Spezialfonds is now in charge of assets worth about $2.1 trillion (1.8 trillion euros), according to its website.

According to Tim Kreutzmann, who works for the German investment fund association BVI, the majority of funds will likely remain considerably below the 20 percent threshold at least for the time being.

It is crucial to note that the new legislation, which was enacted in early July, marks a significant advancement in the way German legislators regulate digital assets.

Germany’s Federal Financial Supervisory Authority, often known as BaFin, continues to advise investors to exercise caution when it comes to investing in digital assets. At the same time, the financial watchdog promotes blockchain technology development in the country as a whole.

Germany is the first country to implement a full blockchain strategy in 2019, supporting 44 adoption initiatives that are expected to be completed by the end of 2021. Blockchain and cryptocurrency were introduced as part of the new strategy, and steps were put in place to make it simpler for investors to access digital investments.

In addition, the country has emerged as a prominent market for cryptocurrency exchange-traded products, commonly known as ETPs.