Making Waves

Making Waves

over 4 years ago2 mins

A new law passed by the German parliament on Friday is set to transform consumer banking in the country – not least by allowing its banks to store and sell cryptocurrencies, starting January 😯

What does this mean?

Bitcoin looks set for its worth month of 2019, falling 15% in November despite recovering somewhat from six-month lows of around $6,500. Cryptocurrency prices rose across the board in late October following the Chinese premier’s announcement that the Middle Kingdom would lean into blockchain tech – but with its state cryptocurrency yet to materialize, enthusiasm waned and crypto trading dried up, meaning those selling stakes to pocket some profit sent prices spiralling downwards.

Bitcoin has had a less-than-stellar November
Bitcoin has had a less-than-stellar November

But things could now be looking up. Not only did an influential legal taskforce in the UK last week release “ground-breaking” guidance on the status of cryptoassets and smart contracts, but Ghana’s central bank said on Tuesday that it would pilot its own national digital currency. And as if that weren’t enough, Germany followed up on Friday with new crypto-friendly banking rules 🙌

Under the law coming into force on January 1st, German banks – which have struggled in recent years – will be allowed to let customers purchase cryptocurrencies via local funds, as well as store such cryptocurrencies themselves.

Why should I care?

The UK legal guidance confirming cryptocurrencies’ status as property provides much-needed certainty, and will likely be influential in helping shape the future regulations needed for the authorities to permit their widespread use 🧐

The new German law, meanwhile – intended to make online banking more secure for local citizens – could ironically end up posing a threat to consumer protection. And while potentially good news for European crypto firms, it may also be bad news for those non-banks currently engaged in a crypto-custodian arms race…

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As ever, the success (or otherwise) of these initiatives will influence approaches to cryptocurrency in other parts of the world – and perhaps prove a boon for existing assets’ prices 🤙

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