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German Law Allowing $415B Investment Into Crypto Takes Effect

The law allows "special funds" to invest up to 20% of their assets in crypto.

Updated Sep 14, 2021, 1:19 p.m. Published Jul 1, 2021, 10:45 a.m.
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A new law in Germany that could theoretically prompt up to $415 billion to flow into crypto takes effect Thursday.

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  • Germany's Fund Location Act, introduced in April and approved by parliament shortly thereafter, permits "Spezialfonds," or special funds, to invest as much as 20% of their portfolios in crypto.
  • The law came into effect today.
  • Should every Spezialfond choose to allocate the full 20% in crypto, that would equate to €350 billion ($415 billion), based on the total assets under management of such funds in Germany.
  • The figure was arrived at by Sven Hildebrandt, CEO of Distributed Ledger Consulting, and was cited in a report by financial newspaper Boersen Zeitung in April.
  • Spezialfonds are the dominant institutional investment vehicle in Germany. A sizable allocation of this market toward crypto could have profound implications across Europe, because the country has the eurozone's largest economy.

Read more: Coinbase Receives Crypto Custody License From German Regulator BaFin

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