New Law May Encourage German Banks to Offer Crypto Services From 2020

With the passing of new legislation, banks in Germany may soon feel more confident to offer direct sales and custody of crypto assets.

AccessTimeIconNov 29, 2019 at 9:30 a.m. UTC
Updated Sep 13, 2021 at 11:45 a.m. UTC

[Updated] With the passing of new legislation, banks in Germany may soon feel more confident to offer direct sales and custody of crypto assets.

Until now, the lack of a legal framework meant banks have been reluctant to offer services around crypto assets, but a new law implementing the fourth EU Money Laundering Directive and bringing financial institutions legal clarity is likely to change that, according to local business newspaper the Handelsblatt in a report on Wednesday.

The bill has now been passed by both the Germany's parliament – the Bundestag – and the Federal Council, and will come into effect on Jan. 1, 2020.

Handelsblatt had originally suggested that banks are currently barred from offering digital assets, but has since amended the article. CoinDesk has also spoken to industry insiders in Germany who confirmed there had been no crypto ban, though one had been considered in earlier an earlier draft of the legislation.

The law goes further than had been previously planned, the Handelsblatt report says. In the previous draft of the bill, banks would have had o have relied on external custodians or dedicated subsidiaries.

Sven Hildebrandt, head of the consulting firm DLC, welcomed the news, telling the Handelsblatt: "Germany is well on its way to becoming a crypto-heaven. The German legislator is playing a pioneering role in the regulation of [crypto assets]. "

German banking association BdB was positive about the legislation, too. "Credit institutions are experienced in the safekeeping of client assets and in risk management, are committed to investor protection and have always been controlled by the financial supervision," it said. As such, banks could "effectively prevent money laundering and terrorist financing" with crypto assets.

The incoming bill would further enable investors to invest in cryptos ​​via Germany-based funds and not be forced to put their money abroad, according to the BdB.

Some commentators expressed concerns over a perceived threat to consumer protections arising from the new law.

Niels Nauhauser, financial expert at the consumer center in Baden-Wuerttemberg, told the newspaper: "If [banks] are allowed to sell cryptocurrencies and keep them for a fee, they run the risk of turning their assets at risk of total loss to their clients, without them knowing what they are getting into. "

Edit (15:30 UTC, Dec. 3 2019): This article has been changed to correct an inaccuracy in the source article from Handelsblatt. We've also added the fact that the law has now been passed.

Nathan DiCamillo contributed reporting.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Investing in the Future of the Digital Economy
October 18-19 | Spring Studio, NYC