GERMANY’S STANCE IN FAVOR OF CRYPTO
Germany has been taking various steps in order to adopt digital assets or cryptocurrencies in the country.
These steps include enabling Coinbase to start custodial services as well as proprietary trading in crypto. Germany passed the Fund location act in favor of cryptocurrencies.
Introduced in April, 2021, the new German law can bring up to $425 billion into digital assets. This law enables ‘special funds’ to invest up to 20% of their assets under management into crypto.
The German parliament passed the law last week and is likely to come into effect from July, 2021 if it is approved by the Upper House of the parliament.
If all the investment firms invest the maximum 20% assets into the crypto industry, the total investment would come around to roughly $425 billion.
The passage of this law is highly beneficial to the country as a whole as well as the firms who have wanted to invest in crypto but couldn’t due to government regulations.
Investment firms can get exposure to a whole new asset class. An asset class which can prove to be the future of the world.
Special firms can invest up to 20% of their assets in crypto and if the firms are smart enough, they will invest how much ever they can.
The crypto market is likely to develop and advance to unimaginable levels in the next decade. The investments made by the institutions now are bound to give them unprecedented profits in the long run.
Moreover, the retailers could be made aware about cryptocurrencies as they hear about this law. Retailers can imitate the institutions and invest small sums of money into crypto or other digital assets.
The retail investors who were ignorant about the crypto market will now be encouraged to invest into this asset class after favorable steps taken by the government.
Finally, the whole country is set to benefit from this law. The country will experience the digitalization and convenience of transactions. Moreover, it will become one of the first countries to do so, giving it a strategic edge above the other countries who are wary of cryptocurrencies.
Germany will become one of the first countries in Europe to take a stance in favor of crypto. This government backed decision will help Germany in the long run as the blockchain technology develops.
Germany’s adoption of cryptocurrencies implies that cryptocurrencies are indeed the future of the world.