Cryptocurrencies‘ main hurdle for mainstream adoption is that banks cannot transact with them due to regulatory concerns. This might change in 2020 at least in Germany when the banks will eventually be allowed to own and transact in the cryptocurrency according to local media reports. Currently, German banks are required to use third party service providers for the crypto industry which is hampering the growth of the sector.
Germany as part of the European Union has had an interesting year in testing out Bitcoin regulations as the cryptocurrency has come under scrutiny more than ever. The European regulation General Data Protection and Regulation (GDPR) passed by the European parliament earlier overshadowed the pace of the growing cryptocurrency. The new regulation put forward the issue of misuse of personal data as well as various Anti Money Laundering (AML) and Know Your Customer (KYC) protocols to combat financial crimes in the economic union. But, despite the tough rules passed in the GDPR law, cryptocurrencies especially Bitcoin continued to grow and now countries have taken the task themselves to redefine the industry within the existing rules and then implementing them within their territories.
The new bill passed by the German parliament Bundestag has been under deliberation for some time and will now be officially enacted next year. The crypto industry is expected to prosper and grow further in the country as the financial ecosystem is opening up to the industry. The bill will now be presented to the 16 states for further scrutiny and ratification purposes.
According to Sven Hildebrandt, head of consulting firm Distributed Ledger Consulting (DLC):
Germany is well on its way to becoming a crypto-heaven. The German legislator is playing a pioneering role in the regulation of cryptocurrency
But, every revolutionary idea is not automatically accepted in a country and progressive industries like the blockchain and cryptocurrencies will have to step up and give the public and the enthusiasts a viable alternative to the current fiat systems. Financial expert Niels Nauhauser in particular is skeptical of the move and believes that banks will have to consider the various risks and other issues associated with cryptocurrencies and their price volatility.
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