BlockchainCrypto BankingCryptocurrencyCryptocurrency FundCryptocurrency RegulationNews

Germany Deliberates on Tokenized Mutual Funds Shares

After passing a law that allows institutional funds (Spezialfonds) in the country to commit only 20% of their portfolios to Bitcoin investments, Germany is perfecting plans to introduce tokenized shares. A regulation is being drafted for the initiative. The Ministry of Finance has also called for comments from members of the public within the country and the window for the public consultation closes by October 1st.

Blockchain technology will be very useful for the tokenized shares as units of the shares will be deployed on it. The proposed shares will offer investors protected exposure to Bitcoin just like other derivatives of the digital asset such as exchange-traded funds (ETF). However, economic and financial experts have cautioned that this could spell doom for Germany’s economy if other European countries turned to tokenization as well.

Germany Embraces Blockchain Technology and Cryptocurrency 

Tokenization pools a number of shares into one such that a token could contain as many as 10 shares. This helps reduce the cost of administration and also lowers the barrier to entry for retail investors. The latest move signals the adoption of blockchain and cryptocurrency by Germany. Germany used to be neutral to cryptocurrencies until its decision in August to open the broad way for Institutional Funds locally known as Spezialfonds to invest in flagship cryptocurrency, Bitcoin. 

📰 Also read:  Bitcoin Adoption in El Salvador: Everything You Need to Know

However, industry experts predicted following the law that it might take another 10 years for each institution to utilize up to 2% in its portfolio for Bitcoin given that Bitcoin and other cryptocurrencies are extremely volatile. They had also predicted that up to $400 billion would be invested in the crypto market. 

Union Investment To Attempt Bitcoin Investment 

Meanwhile, Union Investment, a global investment based in Frankfurt, revealed on Monday that it would add Bitcoin to one of its investment funds. However, it noted that it will limit the allotment to between 1% and 2% since only a few of its private investors would be interested in the digital asset. 

Although Union Investment stated that the Bitcoin fund will be opened in Q4, 2021, no specific date was given. The firm boasts over $400 billion under management. Equities constitute about 80% of its fund.

A Euro-based CBDC is also in the works for member states of the EU including Germany. Back in June, the European Central Bank (ECB) announced via its chairman Christine Lagarde that a CBDC is likely to take four years or more before it can be issued.

📰 Also read:  Price Analysis October 31st, 2024 - BTC, BNB, ETH, SOL, XRP, and DOGE

Tokenhell produces content exposure for over 5,000 crypto companies and you can be one of them too! Contact at info@tokenhell.com if you have any questions. Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by Tokenhell authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content or banners (ad space) posted on the site. Read full terms and conditions / disclaimer.

📰 Also read:  Analysts Say FTX Repayments Will Not be Super Bullish for Crypto: Here is Why

Shelly Melancon (Switzerland)

Shelly is a cryptocurrency enthusiast from Switzerland, she bought her first crypto in 2015 when it was way less popular then it is today and since 2017 she has been writing about cryptocurrency for online news portals. Shelly is the newest addition to the Tokenhell team, she writes mostly news and reviews related articles , stay tuned to her posts to stay up to date with the crypto world.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Skip to content