A new law governing the German Spezialfond will take effect on Aug.2, this law will allow the institutional funds to hold crypto. This action will pave way for the adoption of Bitcoin in other sectors of the country.
German institutional funds will be authorized to keep up to 20% of their assets in cryptocurrencies starting August 2, 2021, potentially paving the way for more mainstream adoption of Bitcoin (BTC) and other crypto assets by the country’s pension funds.
According to Bloomberg, the new law modifies the fixed investing rules that govern Spezialfonds, or special funds, which are only available to institutional investors such as pension funds and insurers. Spezialfonds presently manages assets of $2.1 trillion (1.8 trillion euros).
According to Tim Kreutzmann of the German investment fund group BVI, most funds will likely stay considerably below the 20% target at first, 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 went into effect in early July, marks a significant shift in how German legislators handle digital assets.
BaFin, Germany’s Federal Financial Supervisory Authority, continues to advise caution when it comes to investing in digital assets. At the same time, the country’s financial authority promotes blockchain innovation.
In 2019, Germany launched a comprehensive blockchain strategy, advocating 44 adoption steps that are expected to be implemented by the end of 2021.
The new approach to blockchain and cryptocurrency also included efforts to make it easier for investors to have access to digital assets.
In addition, the country has emerged as a major market for bitcoin exchange-traded products, or ETPs.
