In a pioneering attempt to allow its banks to buy, hold and sell Bitcoin and other cryptocurrencies, German lawmakers have passed a bill which amends a clause in the EU’s Fourth Anti-Money Laundering Directive that currently prohibits banks and other financial institutions from dealing directly in Bitcoin and other digital assets.
According to reports, the bill, which was passed by the lower house of the German Parliament Bundestag earlier this month, has received the green light from the upper house, the Bundesrat.
As of now, banking and other similar financial entities in the EU are prohibited from offering digital assets or storing them for customers. Sensing an opportunity in the EU’s Fourth Anti-Money Laundering Directive, the German Bundestag recently came up with a separate law to implement the move. The bill, which would require further development, would allow German banks to legally buy, sell and store cryptocurrency, just as they buy, sell and store stocks and bonds for retail as well as institutional investors.
Once the new amendment comes into effect from January 1, 2020, banks in Germany would be able to offer their customers cryptocurrencies in addition to traditional financial instruments such as shares or securities. Since 2017, the Directive’s ‘separation bid’ has required all EU banks to conduct crypto operations through third-party custodians and subsidiary entities.
Meanwhile, some experts have cautioned that this might make banks more aggressive in selling
cryptocurrency to clueless investors. They further warned that banks might aggressively advertise these digital assets without educating customers on the associated risks.