In a massive news pushing for cryptocurrency adoption, Germany has recently passed a new law called the Fund Location Act allowing all specialized investment funds to invest up to 20% of their assets in cryptocurrency such as Bitcoin.
The Fund Location Act went into effect on July 1 in Germany. The German federal parliament, the Bundestag, passed the legislation earlier this year on April 22.
With the new act, new and existing domestic special investment funds, also known as Spezialfonds, are permitted to invest up to 20% of their portfolios in cryptoassets, such as bitcoin.
This new law applies to approximately 4,000 special funds in Germany.
According to a report by BVI Investments, 1.88 trillion euros ($2.23 trillion) were invested in open special funds, excluding special real estate funds, as of the end of December 2020.
If all of these funds were to allocate the full 20% in cryptocurrency, it would equate to more than 376 billion euros ($446 billion) in new funds flowing into cryptocurrency.
Germany is one of the many countries eyeing cryptocurrency legislation in the country. Earlier this year, the Federal Financial Supervisory Authority of Germany has granted Coinbase a license to operate in the country.
According to Coinbase, Germany is the world’s fourth largest economy by GDP and is the only EU country to have introduced a full regulatory framework for cryptocurrency platforms.
There is already a thriving blockchain scene, with Germany as the second ranking country, only after the US, in terms of the number of Bitcoin nodes being run.