A Huge Crypto Milestone: German Law Allowing Financial Institutions to Hold Cryptocurrency Takes Effect Tomorrow Aug 2 .
Lessons For Nigeria Lawmakers and Financial Institution Regulators.
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Starting tomorrow, August 2,2021, German institutional funds can hold their assets in cryptocurrency to the tune of 20%. This is a pace setter for more mainstream adoption of cryptocurrency into subsidiary financial institutions.
According to Bloomberg, this alters fixed investment regulations governing specialised funds which are accessible only to institutional funds investors like Pension Funds and insurance companies. Special finds currently controls about $2.1 trillion or €1.8 trillion worth of assets.
German investment association BVI staff Tim Kruetzmann told Bloomberg that at the starting stage, most funds may stay below 20% mark. He explains, ” On the one hand, institutional investors such as insurers have strict regulatory requirements for their investment strategies. On the other hand, they must also want to invest in crypto.”
The new law, passed in early July, is an important evolution in not just how government lawmakers adopts digital assets but will be a precedent for other nations to engage in mainstream adoption of cryptocurrency as part of laws governing financial ecosystems.
Germany first embark on a comprehensive blockchain adoption strategy in 2019, promoting 44 adoption measures set to be realised by the end of 2021. This special fund law is one of the series of adoptions of cryptocurrency into law. This makes it easier for investors to access digital investments.
For emerging economies in Africa especially leading cryptocurrency investors like Nigeria, the government of Nigeria should borrow a leaf from Germany and create laws that allows easy access to digital investments to help boost the nation’s economy and alleviate the growing inflation and unemployment indices in the country.