From 2020, it will be legal for banks to offer financial services such as virtual currency trades and storage in Germany, and banks may launch virtual currency-related services. 

It is Germany's new money-laundering bill that allows banks to handle virtual currency.

The bill, which was created to implement the EU's Fourth Money Laundering Directive, goes well beyond the scope of anti-money laundering. The bank will be able to provide virtual currency services directly to customers without intervention.

The bill has already been passed by the German Parliament and is now waiting for consensus at the state level.

If the state legislature approves the bill, German citizens will be able to hold a virtual currency such as bitcoin in a general bank account. Furthermore, financial institutions will be able to provide online access and management services for various assets of customers, including virtual currencies, in addition to stocks and bonds.

The bill also stipulates flexible measures, such as extending the application deadline for obtaining the necessary permission.

Virtual currency industry reaction

The German cryptocurrency industry seems to be very happy with this new bill.

Sven Hildebrandt, head of consulting company Distributed Ledger Consulting, said, "Germany is becoming cryptocurrency heaven. German legislators play a pioneering role in cryptocurrency regulation."

The Deutsche Bank Association also expressed its welcoming position on the new bill, saying that banks with extensive experience in customer asset custody and risk management can effectively prevent money laundering and terrorist financing. 

Concerns about consumer protection

On the other hand, Niels Neuhauser, financial expert at Baden-Wuerttemberg Consumer Center, said that the new legislation would allow banks to take every step to acquire new customers while still lacking explanations for cryptocurrency investment risks. 

Basically, banks sell a variety of financial products if fees are appropriate. If banks are allowed to sell cryptocurrencies and store them for a fee, the bank will be exposing the asset to a client who might not know the risk involved. 

The virtual currency also comes with a risk of hacking. Banks will have to be more enthusiastic about cybersecurity issues.

However, the Handelsblatt newspaper states that the true value of the new bill is that the definition of virtual currency is legally clear for the first time. In the bill, virtual currency is defined as follows:

A digital representation of value not issued by any central bank or public institution, recognized as a means of exchange and payment, or for investment purposes.

The fact that the Deutsche Bank Association welcomes the handling of cryptocurrencies with the help of various hands, and that virtual currencies will be handled for general customers at banks will be a major advance in the spread of virtual currencies. I am wondering if a new cryptocurrency regulation with a clear definition will emerge from Germany, which respects the rules.