The German government has approved new legislation allowing more than 4,000 institutional investors to invest in crypto assets. Now, the special funds (also known as Spezialfonds) can access digital assets with fixed investment rules.
Only Insurers and pension companies can access crypto assets through the special funds.
Both of them control about $2.1 trillion worth of assets out of which none are in crypto. Now with crypto holding up to 20%, they can theoretically invest up to $422 billion.
Since last year, the German government has noticed that institutional investors are taking an extensive interest in crypto assets. Since most rich investors dominate some crypto assets which then gain recognition, this attracts more investors who want to gain exposure.
As of now, the law is passed in Germany’s federal parliament, the Bundestag. Now, the country’s federal council has to declare the law. As for Germany, the new law becomes a major achievement in the mainstream adoption of crypto assets.
Moreover, many prominent figures in the crypto industry will soon make investments after the new law’s implementation. Some of the prominent names include Mike Novogratz, CEO of Galaxy Investment Partners, and renowned hedge fund manager Alan Howard.
The majority of the crypto experts agree that this move will boost the company in the right direction. Also, crypto development in the country will let Germany maintain its position as Europe’s leading economic nation.
While we had seen El Salvador implementing the law to make Bitcoin legal tender, bringing cryptocurrencies into mainstream finance, many experts had reservations about making a crypto equivalent to a fiat currency. However, Germany’s decision doesn’t bring cryptocurrencies into the mainstream market so aggressively. Rather, major crypto companies can now set up systems so that they can gradually incorporate them into mainstream finance with the least resistance. By doing so, they prevent unnecessary rifts.