In November, Germany became the leader of the free world where government acceptance of cryptocurrency is concerned.
That’s because last week, a bill was pushed forward by the Bundesrat, the upper house of Germany’s legislature, that would allow German banks to directly sell and custody cryptocurrencies for their clients as of January 1st, 2020.
Next up the country’s 16 states will make a final decision on the bill, though domestic analysts don’t expect resistance to the legislation at the national level.
That means the way is paved for the bill to officially come into law, a development that would mark a watershed moment not only for Germany but also for cryptocurrencies in general.
Crypto Goes Mainstream in Heart of Europe
Germany is one of the largest economies in the world and the EU’s most influential state. To that end, the country often sets the tone economically and politically for many nations in Europe.
With its new crypto bill, Germany’s legislators are signaling to their constituents and to the international stage that cryptocurrencies are to be embraced, not rejected. This dynamic will make Germany attractive to crypto projects around the globe who are interested in having a base in a very pro-crypto country.
“Germany is well on its way to becoming a crypto heaven,” Sven Hildebrandt, the lead consultant at major consulting firm DLC, said last week.
In extension, other European countries and beyond may follow in Germany’s stead in passing ensuing waves of pro-crypto legislation. If in one decade’s time more banks than not directly deal with cryptocurrencies, German banks will have been the trailblazers.
Moreover, it cannot be overstated just how much Germany’s new friendly crypto bill does to move in the direction of normalizing and legitimizing cryptocurrencies as another avenue of mainstream finance. If digital currencies do go on to become widely adopted global financial tools, one could look back on Germany’s legislation as one of the important dominoes that dropped along that way.
The passing of the crypto bill comes on the heels of the German government publishing a national blockchain strategy for the first time back in September. The strategy put the country on course toward becoming a hub for blockchain enterprises.
“Germany should be an attractive location for the development of blockchain applications and investments in their scaling,” two government ministries said in a joint announcement at the time.
Germany Is Epicenter for “Digital Euro” Movement
Just like the U.S. Federal Reserve and China’s central bank, Europe’s top financial officials have taken serious notice of the Facebook-backed Libra stablecoin project.
In response, some European leaders have called for tougher restrictions on cryptocurrencies in general, though others yet have argued the European Union should become a hub for crypto innovation.
In that latter camp is the Association of German Banks, a group of 200 private German banks that serve as finance industry lobbyists in the EU’s biggest economy. Weeks ago, the association argued that Europe’s major stakeholders to back the development of a digital euro that had smart contract capabilities, saying they would commit to supporting the effort:
“The German private banks will play their part in establishing a sustainable and innovative monetary system. For this purpose, a programmable account and crypto-based digital euro should be created and its interoperability with book money ensured. The condition for this is establishing a common pan-European payments platform for the programmable digital euro.”
The association’s plea for a digital euro came one month after German Finance Minister Olaf Scholz should create its own public cryptocurrency.
“We should not leave the field to China, Russia, the US or any private providers,” Scholz said.
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