My Opinion

German banks are still holding back on Bitcoin trading. The coming year could finally bring the big change.

Given the usual skepticism of many banks in Germany, the rather rare messages about getting into the crypto sector are probably all the more interesting. With Postbank, one of the largest and most well-known companies in the German banking industry now dares to team up with a crypto service provider. Postbank and the company Coindex have decided to cooperate. Postbank customers who have long been thinking of trading Bitcoin and Altcoins can easily do so soon. For this purpose, Postbank customers will have access to the special Coindex trading platform.

This is how the current joint reports from the cooperation partners state. Who is Coindex? This is a young, new company with headquarters in Bielefeld. The startup will finally open its own platform doors in the first month of the new year. With the slogan "platform for intelligent crypto portfolios", the service provider definitely gets some attention from potential investors. Digital assets are expected to be tradable on an index basis from next year. At present, a revision phase is underway, and Postbank investors should be able to invest in crypto-values starting in March. Which currencies should be available at the end in detail, the Coindex website does not answer yet. However, not only Bitcoin and Ethereum are to be listed as the basis for the in-house "Cdx".

Behind the term "Cdx", the platform hides a "fully automatic dynamic index". This index should be able to map the entire crypto market. It is known that lenders do not have to create their own wallet. The normal Coindex account including legitimacy is sufficient for investments. The management is supervised by the government. The aim is to make trade as easy as it is transparent. Investor needs should be the linchpin for trading. The Postbank ask interested parties on their website also for wishes and suggestions for the upcoming trading platform. The likelihood that bank customers in Germany are able to trade next year Ethereum, Litecoin and, of course, Bitcoin is high. Politics is currently laying the foundation for a market opening. Not all crypto followers show up positive mood by reading such messages.

Thanks to a new money laundering law, German banks will be able to retain Bitcoin and offer crypto services in the future. An important step in the adaptation.

From 2020, it will be legal for German banks to sell cryptocurrencies like Bitcoin. German financial institutions are not yet allowed to sell cryptocurrencies directly to their clients, but this could change in the future. Thanks to the planned law implementing the EU's fourth money laundering directive. This should allow German banks to keep Bitcoin and offer other crypto services in the future.

As decided last week in the Bundestag, crypto values in Germany are becoming an official, regulated financial instrument. The new money laundering law allows banks to store and offer cryptocurrencies. This could open up a new business area for German banks from 2020 onwards. Currently, no institute offers its clients virtual assets, except for the Bitwala bank in Berlin. The law has already been passed by the Bundestag and now awaits the consensus of the 16 federal states.

The German crypto community is satisfied with the bill and thinks that Germany is well on the way to becoming a crypto-heaven. If the federal states agree with the proposal, German citizens could hold their digital currencies directly with banks. In doing so, banks will provide appropriate online banking solutions for the full range of assets, including stocks, bonds and cryptocurrencies. This means that crypto owners can access their credit at the push of a button.

The final bill also provides for a deletion of the so-called separation bid. According to him, the re-regulated crypto-surplus transaction should not have been offered together with other regulated banking operations from the same legal entity. Until now, banks had to resort to special subsidiaries or external depositaries.

Interestingly, the Federal Association of German Banks (BdB) welcomes the new regulation. It is argued that lenders already have experience in storing client assets and risk management. The new law could prevent cryptographic money laundering and allow German investors access to the crypto room through domestic funds.

However, not everyone is satisfied with the bill because critics fear less consumer protection. The consumer center of Baden-Wuerttemberg fears that the banks with the new products will sell more aggressively and with all means at new customers. However, there is a risk that customers may not be sufficiently informed about the potential risks of investing in cryptos. When it comes to the safekeeping of crypto assets, Bafin¹ supervision must also intensively examine the additional IT risks, since storing Bitcoin places entirely new demands on the technical infrastructure.

The term "crypto values" will now appear and be defined in German law for the first time and is thus considered the core of the new regulation. By definition, crypto-values are digital representations of a value that has not been issued by any public authority or central bank but is used for investment purposes and accepted as a means of payment and exchange. On November 29, 2019, the Federal Council finally adopted the law, which means that the new regulation can enter into force on January 1, 2020.

¹⁾ Bafin - Federal Financial Supervisory Authority
The Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht) is a German public-law institution with legal capacity based in Frankfurt/Main and Bonn. It is subject to the legal and technical supervision of the Federal Ministry of Finance.

Facebook met with the Libra project across Europe strong resistance, whether in politics or business and the citizens of the countries. A new survey reaffirms these results, pointing to continued high levels of people's trust in traditional institutions such as banks.

Between Facebook's Libra project and Google's new Google Pay-linked checking accounts, the tech giants are showing big plans to integrate into the digital finance world of Bitcoin and Co. But not many tech and financial experts will seize the opportunity to leverage such services, according to a new survey by Blind, an app-based "anonymous social network".

The published results show that more than 5,000 professionals from various companies, including Apple, Google, Amazon, Facebook and Uber, are skeptical. The study found that the overwhelming majority of professionals, around 62 percent, trusted "traditional banks" as "big tech" even earlier in their financial data. Of the tech professionals surveyed, 57 percent said they trust banks more than big tech companies, while nearly 70 percent of those working in finance said they favor traditional institutions.

In addition, some technology company employees do not even trust their own company with their financial information - least of all on Uber and Facebook. Of the 186 surveyed Facebook employees, only 21 percent said they trusted their data to the social media giants. (Uber scored even less - bleak 16 percent, though only 45 Uber employees took part in the survey.)

The results suggest that even Facebook employees would not trust Libra. Cuire Kim, Blind's brand marketing manager responsible for conducting the survey, made it clear that the survey did not specifically ask about Libra. However, given Facebook's collaboration with Libra, it is not a big leap, despite the company's efforts to separate itself and its reputation from the project.

Libra has experienced a very different response since its creation in June this year. While some saw Libra as a way to capitalize on the crypto-mainstream and legitimize the industry, others, especially the regulators, were reluctant to accept the project as the noble effort it claims to be.

Both Mark Zuckerberg, CEO of Facebook, and David Marcus, head of the company's blockchain division, have been briefed by members of the US Congress on Libra and its perceived potential to combat money laundering and other white-collar crime in recent months silent about the concerns raised by the project regarding data protection.

Given Facebook's many published data scandals, including Cambridge Analytica's fiasco last year, it's not surprising that even its own employees are not too keen to pass on sensitive financial data to the company. Brad Garlinghouse, CEO of Ripple, also says that Facebook has a fundamental trust problem and that trust is actually the foundation of all further steps and actions in a sensitive market such as the financial market. Garlinghouse believes Libra's vision is good, but the company would first have to convince politicians and businesses worldwide that Libra is 100% secure and does not collect data and share it with third parties.