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Germany Leads the Way in Opening up to Institutional Crypto Funds

A new piece of legislation in Germany that enables managers of the most popular institutional investment funds (named Spezialfonds) to allocate 20% of them to crypto-assets is planned to go into effect on July 1st.

This decision was praised as elevating Germany’s position as a financial investment hub, with many believing that it would help the crypto industry, in general, as it legitimizes the asset class.

“The addition of crypto assets in Spezialfonds is an important step for their acceptance. Here, the law is going in the right direction and we expressly welcome it,” declared German parliamentarian Frank Schäffler.

The law will apply to already existing Spezialfonds but also to the new ones created by institutional investors which include financial institutions, insurance companies, as well as pension funds. Overall, close to 4,000 investment funds that already exist could be eligible to invest in crypto assets such as Bitcoin.

Sven Hildebrandt, CEO of Germany-based Distributed Ledger Consulting (DLC), declared: “This is damn huge,” adding that, about €1.2 trillion ($1.8 trillion) is invested into Spefialfonds, and “right now, 0% of the funds are invested [in cryptocurrencies], because they’re just not allowed.”

Hildebrandt has been working on updating the legislation for more than two years. If Spezialfonds decide to place even just 1% in crypto, the impact on the crypto industry, as a whole, would be huge:

“This won’t happen overnight, but we are talking about the largest investment vehicle that we have in Germany—literally all the money is in there.” In theory, up to €350 billion ($422 billion) may enter the crypto market from Spezialfonds alone.

Source: Decrypt.co

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