A new regulation in Germany will take effect tomorrow, allowing institutional funds to invest up to 20% of their assets in cryptocurrency.
With a new rule allowing funds like Spezialfonds to invest and manage up to 20% of their assets in cryptocurrencies, Germany is becoming a country that is developing an interest in crypto adoption.
This is a significant event right now because these funds are exclusively available to institutional investors. This means that if insurance firms or various pension funds decide to diversify and invest in crypto assets, the state provides them permission.
Institutions in Germany manage around € 1.8 trillion, or $ 2.1 trillion, according to data published in the daily Bloomberg.
The new law did not go unnoticed by numerous experts, and Tim Kreutzmann was one of the first to weigh in on the situation, believing that the funds will be more cautious at first.
Tim Kreutzmann, an expert on crypto-assets at BVI, Germany’s fund industry body said:
- Most funds will initially stay well below the 20% mark;– 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.“
Another expert, Kamil Kaczmarski, a financial services adviser at Oliver Wyman, believes that cryptocurrencies can be highly appealing to most conservative German investors.