A newly introduced German law, the Fund Location Act, reportedly will allow all specialized investment funds to invest up to 20% of their $2 trillion assets in crypto management.
The new German law coming into force today has the potential of an investment up to $415 billion into crypto.
While this new law, which was introduced in April 2021 and soon passed by Parliament, allows a much greater discretion in Germany’s great investment funds. The new law allows each fund to allocate up to 20% of its crypto assets at a time.
Today, with the new law coming into force after just a few days before Germany’s Financial Supervisory Authority (BaFin) granted Coinbase a new license took another important crypto-friendly step, allowing German consumers to be provided with Coinbase custody. This new regulation between Coinbase and the German government will form the basis for many other crypto exchanges to open stores in the European nation.
If 20% (total funds) of total investment funds in Germany were allowed in crypto, it would be $415 billion in market share. Although not all special funds appear to be crypto-allocated, the current annual return on crypto-assets prompts many of these funds to create a major crypto position among them.
Spezialfonds are one of the most powerful investment bearers in Germany because they are a favorite fund for companies and institutions. The new law also applies to newly established financial institutions, insurance companies, and pension funds.
So far, Spezialfonds have not been allowed to invest in crypto assets. If Germany maintains its position as the dominant economic power in Europe, more European countries will be able to follow a similar path to what Germany took.