As much as $415 billion worth of investments could flow into
cryptocurrencies as new laws governing German Spezialfonds go into
effect.
Beginning on August 2, 2021, German institutional funds will be able
to hold up to 20% of their assets in cryptocurrencies, possibly setting
the stage for wider mainstream acceptance of Bitcoin (BTC) and other crypto assets by the nation’s pension funds.
As Bloomberg reports,
the new law alters fixed investment rules governing Spezialfonds, also
known as special funds, which are only accessible to institutional
investors such as pension funds and insurers. Spezialfonds currently
manage about $2.1 trillion, or 1.8 trillion euros, worth of assets.
Related: Hedge funds see the crypto market decline as an investment opportunity
Tim
Kreutzmann, who works for German investment fund association BVI, told
Bloomberg that most funds will likely stay well below the 20% mark
initially, explaining:
“On the one hand, institutional
investors such as insurers have strict regulatory requirements for their
investment strategies. And on the other hand, they must also want to
invest in crypto.”
The new rule, which was passed in
early July, represents an important evolution in how German lawmakers
govern digital assets. Germany’s Federal Financial Supervisory
Authority, better known as BaFin, continues to urge caution with respect
to digital-asset investing. At the same time, the financial watchdog
encourages blockchain innovation in the country.
Germany first embarked on a comprehensive blockchain strategy in 2019,
promoting 44 adoption measures that are set to be realized by the end
of 2021. The new approach to blockchain and crypto also introduced
measures that would make it easier for investors to access digital
investments.
The nation has also become a leading market for
cryptocurrency exchange-traded products, or ETPs. As Cointelegraph
reported, investment product issuer 21Shares has partnered with German brokerage comdirect to provide crypto-focused ETPs to nearly 3 million customers.
source link : https://cointelegraph.com/news/german-law-allowing-institutional-funds-to-hold-crypto-comes-into-effect-aug-2
