Banks in the European Union would be able to offer banking and custodian services to the cryptocurrency enthusiasts by 2020. Per the latest report, the bill has been passed but remained to be enforced as law.
It was first reported by a local media outlet, stating the country is all set to debut the 5th Money Laundering Directive (5MLD) on January 10, 2019. In essence, the 4MDL restricted the country’s banks in dealing with digital currency, on the contrary, the 5MDL bids to release the limitation set for the country’s financial institutions. The new requirements of the upcoming 5MDL suggest that banks and financial institutions can offer services related to digital currencies such as Bitcoin – more so, it can also facilitate the custodial solutions for crypto assets.
Although the aforementioned bill remained to be enforced, the community is cordially welcoming the new move. Echoing the similar concern, Sven Hildebrandt, Head of Distributed Ledger Consulting stated;
Germany is well on its way to crypto heaven. The German legislator is playing a pioneering role in the regulation of crypto custodians.
Undeniably, regulating cryptocurrency has been the head-ache for regulators, policymakers and banking heads. However, the country’s key vision to enable banks providing support for digital assets is a new initiative to crack down the Anti-Money Laundering and terrorist-financing. This being said, the crypto industry has been classified as “Obliged entities” and as per the report, the crypto industry has to implement full AML and counter-terrorist financial controls in order to meet their new obligation.
Besides Sven Hildebrandt, the new bill in the EU has received support from the Association of German Banks (BdB) as well. The Association believes that the new regulatory framework will entice the potential German investors to explore the crypto market – meantime, eradicating the crypto-related money laundering and other illicit activities.
“Especially 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”, said BdB.
Banking intervention in cryptocurrency transactions plays a vital role as it streamlines the process of transactions between two individuals while also ensuring both the parties dealing responsibly. Unlike countries such as India where banks aren’t allowed to serve any crypto-related transactions, Germany might be the leading country to witness its positive stance towards cryptocurrency.
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