CRYPTOCURRENCY: Germany has just passed a law allowing its Spezialfonds to purchase digital assets such as bitcoin and other cryptocurrencies
The Bundestag, Germany’s federal parliament, has passed a law allowing German Spezialfonds to invest in digital assets from July 1, 2021. The law has yet to be confirmed by the Bundesrat, the German equivalent Senate, but bodes well for the pursuit of the bullrun !
“It’s absolutely huge”
This bill will be explained exclusively to the Spezialfonds , of which there are more than 4,000 in Germany. The Spezialfonds are investment funds unlisted reserved to accredited investors and financial institutions. These funds must be endowed with at least 6 million euros to operate and have only one investor. Usually, these investment vehicles are created by financial institutions, insurance companies and pension funds.
In addition, the Spezialfonds allow a certain flexibility in terms of liquidity, diversification, restrictions on borrowing and leverage . At the same time, the funds’ legal regime offers insurance to investors, making them investment vehicles of choice.
The text under discussion will authorize these 4,000 funds to allocate up to 20% of their capital to digital assets:
“It’s absolutely huge, 1.2 trillion euros are invested in Spezialfonds, which have specific investment terms, and at the moment 0% of the funds are invested [in cryptoassets], because they don’t are not allowed to invest. ”
Sven Hildebrandt, PDG of Distributed Ledger Consulting – Source: Decrypt
According to Decrypt information, it has now been two years since Hildebrandt and the German asset manager lobby campaigned for federal law to allow Spezialfonds to invest in digital assets.
With this new law, Germany wants to strengthen its position as a major financial center in Europe. Indeed, the consequences of Brexit are starting to be felt, volumes traded on the London Stock Exchange are in free fall and Amsterdam has become the leading financial center in Europe. Germany is therefore taking a step in the right direction by allowing institutional funds to gain exposure to digital assets up to 20% of their capital. Meanwhile, France … is toughening the rules of the game for crypto players.
