Reports from Germany suggest amendments in the law stemming from the 5th EU Anti Money Laundering (AML) Directive passing through the Bundestag federal parliament has opened the door for traditional banking and financial institutions to store Bitcoin and other crypto assets for clients. It is believed cryptocurrency custody facilities at German banks could be operational as early as 2020.
Erfolgreiche Lobbyarbeit: #Banken, die #Bitcoin&Co verwahren, müssen dieses Geschäft nicht mehr auslagern – und können ab 2020 Krypto-Assets direkt im Onlinebanking anbieten. Alteingesessene Anbieter erhalten so Rechtssicherheit – aber auch neue Konkurrenz.https://t.co/tGkpLxi1th
— Felix Holtermann (@FelixHoltermann) November 27, 2019
Leading German business newspaper Handelsblatt advise that, with the appropriate licence, banks will be able to offer online banking that encompasses stocks, bonds and cryptocurrency dealing and storage.
Hanelsblatt quote Dr Sven Hildebrandt, partner at Distributed Ledger Consulting (DLC), as saying “Germany is well on its way to becoming a crypto-heaven. The German legislator is playing a pioneering role in the regulation of crypto-truths.”
The article implies a similar positive sentiment is echoed by the Federal Association of German Banks (BdB), who feel “…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 financial supervision.”
In his social media post, Benjamin Schuab, Project Manager and Research Assistant at the Frankfurt School Blockchain Centre (FSBC), is also generally in favour of the new regulations but more cautious as “For banks, the recent development provides opportunities and bears risks at the same time. This category applies to the big players such as Börse Stuttgart but also to smaller companies…if they seek to tap into this new market segment.”
Speaking to Hanelsblatt, financial expert Niels Nauhauser voiced an opposing view as “Basically, banks sell a variety of financial products, if the commission is right,” but doubts the customers themselves have enough knowledge of digital assets and if the banks “…are allowed to sell cryptocurrencies and keep them for a fee, [there is a risk] …of total loss to their clients.”
The new AML regulations and the possibility of opening Bitcoin custody to banks comes at a time when Germany is still processing the fallout of a multi-billion Euro money-laundering scandal involving Danske Bank which, in September, saw law enforcement officers raid the headquarters of leading German financial institution, Deutsche Bank.