In Germany, new legislation enabling managers of the most popular institutional investment funds—the so-called Spezialfonds—to allocate 20% of them to crypto-assets is set to come into force on July 1.
The measure has been hailed as a big boost to Germany’s position as a financial investment hub, and experts believe it will nurture the crypto industry as a whole by further legitimizing the asset class.
"The addition of crypto assets in Spezialfonds is an important step for their acceptance,” German parliamentarian Frank Schäffler told Decrypt. “Here, the law is going in the right direction and we expressly welcome it,” he added.
The law cleared Germany’s federal parliament, the Bundestag, last Thursday, and is due to be rubber-stamped by the country’s Federal Council imminently. It will apply to both existing Spezialfonds and to new ones set up by institutional investors such as financial institutions, insurance companies, and pension funds. In all, around 4,000 existing investment funds will now be eligible to invest in Bitcoin and other crypto assets, Sven Hildebrandt, CEO of Germany-based Distributed Ledger Consulting (DLC) told Decrypt.
“This is damn huge,” Hildebrandt said. Around €1.2 trillion ($1.8 trillion) is invested into Spezialfonds, which have fixed investment conditions, and “right now, 0% of the funds are invested [in cryptocurrencies], because they're just not allowed.”
Hildebrandt has lobbied for over two years to update the legislation in this area, alongside BVI, the nation’s Asset Management Association. When the new regulations become law on July 1, if Spezialfonds (excluding those designed purely for physical assets—around a third) choose to place even a 1% fund alloca...