Bitcoin Forum

The EU has launched a new bill on the fourth Money Laundering Directive, which is scheduled to enter into force in 2020. Until now, banking institutions were prohibited from offering virtual assets or storing them for their customers. The German Bundestag has taken this EU law as an opportunity and recently passed its own bill to implement it, which provides for corresponding simplifications. However, further approval is required before the law can enter into force.

In the new draft law, the requirement for separation, which still existed in the first version, was deleted. The separation requirement stated that the retention of Bitcoin and other digital assets must not originate from the same legal entity as other banking transactions. Accordingly, banks would have had to resort to external service providers who offer an appropriate custody service.

Read more Here (https://www.crypto-news-flash.com/new-law-banks-hold-and-sell-bitcoin/)

I don't think this would have a huge impact though, to be honest. The banks will still not want to work with crypto-currency and definelty not bitcoin, when it is literally the opposite of the values that they support.

It's going to make the small amount of banks that wanted to work with bitcoin easier to do so, but no one is going to start jumping to offer crypto services.

What's the exact date for this issuance BTW? So, I'm assuming banks can't work with BTC and other cryptos rn?

I fully read the ones concerning Germany, and they're the first to take advantage of this draft for their own benefit. At the least, at least the legal status of bitcoin is getting recognized by an organization who once eyed Malta for its openness to cryptocurrencies and other businesses catering to disruptive tech and such. I just hope that this comes into fruition and not just leave the drafts be drafts without any future readings and/or hearings until it becomes a law.

Why would they? They need their customers to use them for a very, very long term. Even in Turkey some banks are prohibiting Bitcoin trade (although it's not illegal at all) in ways that they literally ban you from using some of their services if you are sending/receiving money from known exchanges. Although the legal obstacle is gone, this doesn't mean that they are going to start doing it.

Instead of looking at this development negatively, I would be welcoming this possibility of banks to finally be able virtual assets to their customers. Things depend on the demand on this matter. of course, not all banks will be offering this service because there is no law demanding them to. However, since banks are into business, they will eventually offer something if there is a demand for it because that is the way they are making money. And when this has been previously not allowed, banks who think that there is a big demand from their base customers will certainly look into this possible market.

Do we have a better source for this? I could only find one similar article (https://www.fxstreet.com/cryptocurrencies/news/new-eu-bill-on-the-fourth-money-laundering-directive-allows-banks-to-hold-and-sell-bitcoin-201911290253), but no one else seem to be reporting on it.


Some US banks have already gone around, so I wouldn't close the doors here. At the end of the day, they'll have no choice but to provide a service if there is demand for it, or they risk getting left behind by competitors.

bitcoin isn't in conflict with their values. they can take deposits and issue loans denominated in BTC. they can even apply fractional reserve banking. banking with fiat is functionally no different than banking with BTC---not for commercial/retail banks anyway.

i'd prefer to see people being their own bank, but i suspect there is a big market for banking/brokerage customers who don't want to take custody of their own coins.

The article describes that the banks are


How they can prove this with bitcoin? if a normal person can easily purchase a hardware wallet or download known wallets such as electrum, bitcoin core or wasabi wallet that can provide a very tight security. While the banks can be considered as a third party which we have seen on what happens mostly if our funds are stored there.

Sounds like collecting rainwater from your home roof and storing them in your community's Central Water reserve for safety reason OR collecting the rainwater from the Central Water reserve. Well, that is Ok for most people but not for some.
This is Ok as long as freedom to "Be your own bank" is not infringed.

And that will give you idea that most banks are now silently working or checking on blockchain technology.
They will not say directly that they are considering it, but because of the current developments in crypto and blockchain tech, I think most of them are already into it.
Otherwise, they will be left behind by this technology advancement.
We all can say that it is the opposite of how their system works, but if there's demand, they will always take a deeper analysis on how it will affect their business as a whole.
This is the reason why they are not jumping on the bandwagon so fast.

this is not about "banking" (storing/savings) this is about letting EU financial institutions to be able to offer ETF investments and able to day trad bitcoin on behalf of its customers

in the first draft it would have allowed banks to purchase ETF assets via third parties services (thus banks only 'own' the shares) on customers behalf but the newest draft means banks could create their own ETF's and lock up coins in their own custody and then buy and sell shares to customers

its like
no draft = not being able to play poker
first draft = banks being the proxy poker player for someone else that has no clue
newest draft = banks being the 'house' able to shuffle the deck and hand out the cards

I have read the article and from what I can see, the statement of Fabio de Masi is quite true, that banks could potentially market these cryptocurrencies as get-rich-quick schemes without proper briefing to potential investors of the risks involved. But still, it's good to see such adoption on the way. Germany and China are those countries leading the digital payment systems, slowly replacing paper money for digital means, and it's generally good to see Germany keeping up it's ways.

Let's not all get so happy, keep in mind there is a need for further approval before this bill is going to get passed, and there's a pretty high chance that it ends up getting blocked, the EU isn't the most crypto-friendly bunch.

I am no expert when it comes to economics or bills, but I feel like this isn't focused on banking - instead its more focused on the anti-AML side of things, and this is just going to impose a new ruleset on the banks? Will this even affect regular users?

I agree that the problem is not only that it's prohibited but also that the banks don't want to do that. Creating the legislation that at least allows it is a start, though. Maybe some banks would like to take this opportunity. I think it could actually ensure their survival and the usage of customers you've mentioned. If banks offer people to store Bitcoins with them, they can charge a small extra fee many would be interested to pay for what might seem like double protection as well as the guarantee of legality. And yes, this way this person loses the sole access to money and the pseudo-anonymity, but some might value other things over it and still be interested in cryptos. And besides, it's banks that could profit (and some already do) most from the reduced fees or international transfers.

If I know better, I would say that's a good move but the government isn't trustworthy. Today they're in bed with Bitcoin, Cryptocurrencies and Blockchain, The next day, they are on a full flexge war against Bitcoin. One thing is quite certain ~ If the government is willing to get Bitcoin to be available in banks, then there's a catch. Also Bitcoin in bank just gives government an opportunity to manipulate and exploit bitcoin.

I think if the government will really allow to hold and sell bitcoin through banks that's gonna be kinda weird. I meant like you said it will be probably manipulated by them. I meant the reason of the appear of bitcoin as well as other cryptocurrencies is the free use of it without any third party (banks).

Hardware and software wallets provide security when they are used correctly, but not everyone has the necessary knowledge to do it, and people also do mistakes by ignoring the instructions they were given. They buy hardware wallets with tampered security seals, install wallets without verifying signatures, use wallets in insecure environment and fall victim of clipboard malware and so on.

As for third parties that get hacked, I think it's much less likely for banks to get hacked than for cryptocurrency exchanges. And banks won't need to store a lot of coins in hot wallets, so they will be utilizing cold storages. And if they will be insured, there's even less risks for customers when it comes to security.

What people should really be worried when it comes to banks and crypto, is that banks could easily freeze your money if their algorithms or employees see your funds as suspicious.

The custody thing is what most intrigues/alarms me. Banks screw up all the time. If they do get into this area then someone someday is going to make a monumental mistake and I wonder how it's going to be resolved.

It'll be interesting to see how they frame the terms and what customers are actually getting themselves into. Will you be guaranteed crypto redemption no matter what?

Yes I think governments along with banks will only allow crypto usage if they are regulated. Without regulations they wont accept crypto, its very simple.
In my view crypto system will work in parallel with banks at least in a decade or so.

I really don't think the banks were actually waiting on this legislation before engaging in cryptocurrency trades. After all, if they were that interest in getting into the market, they would have just use a broker or a custodian to hold onto their crypto assets.

Realistically, banks are more interested in replicating the technology so that it can be applied to government-backed currencies. Why would they want to transfer power to the very same decentralized system that is poised to usurp the banks?

Only an idiot would invest in the technology that is designed to destroy you.

why would someone store their coins in a bank?

them offering such services will be good that means they somehow wanna find a way to be relevant still in the crypto age. if there are people going to store the coins in the banks, these are the ones who wanna be fucked by the banks. these banks may appear crypto friendly but they really aren't. exchanges today that end being scam can get away too. banks are more powerful that these exchanges they can get away if they messup as they always do.

I think it's the only way many will be tempted and reassured. Huge swathes of the population are not prepared to pay enough attention to secure their funds correctly or don't feel confident enough. They want their hand held. It's a long way from ideal but I can get why they feel that way.

My own curiosity about bank storing bitcoin is that I think is going to be a cumbersome exercise on how to identify individual wallet. Are the owners of crypto or bitcoin going to transfer to the bank store from being at home or they must go to the bank to ensure proper documents is taken. I don't know if I'm properly understood in my view.

That simply means that exchanges will have a tough competition from the banking sector when they start handing out cards  :D. With the millions of dollars worth of hack we hear every few months it is better than a different financial sector who has some experience dealing with fiat hacks and the positive aspect i see is that they will be having insurance for the amount of money each customer lost rather than the rest of the hacks we saw in the market where the end user suffers the loss, the next five years is really interesting in this market space as we will see major changes.

Banks don't mostly do things that will benefit the people except it benefits them and from the way the government and some of the financial institutions have reacted towards crypto over the past few months it is a bit surprising to see this sudden change, although it is certainly good news as this will have a positive impact on crypto, from the look of things, 2020 is already looking promising i must say.

If things start to roll, I think they'll mass-produce Bakkt. Get the service fee and make more money.

But the scenario of an average joe buy Bitcoin from a bank and ask them to hold it, while it looks weird, definitely could happen. Lots of people still love the convenience and push the risk to other parties.

Banks have a choice. They can continue to ignore cryptocurrency and work as before under the protection of the state. This cryptocurrency has no particular choice. It will develop further only if it cooperates with other payment systems, and in this case cryptocurrency can not do without cooperation with banks. Therefore, the appearance of such a law for the states of the European Union will be very useful for cryptocurrency.

yep, that's one of my fears with open-ended ETFs and physically settled markets like bakkt as well. if institutions become significantly exposed to BTC, wall street custodians could become the "richest" bitcoin holders in the world. that has some slightly scary implications for contentious forks.

if some dodgy exchange gets hacked (like binance last year), of course the idea of a rollback would be laughable. but how about if fidelity gets hacked for 15% of the entire bitcoin supply 10 years from now? not only will the "too big to fail" mentality of 2008 be applied from a top-down political perspective, but the economic incentives to coordinate with miners on a rollback would be massive!

so much for immutability. :P

I don't understand. Why would a bank want anything to do with crypto? They make more with fiat. We all know crypto is against banks and viceversa. Crypto is freedom and decentralization and banks are you being controlled and centralized. They are natural enemies so why would a bank hold crypto for any reason? I can understand if the bank secretly holds crypto if they believe in it but don't want that present that message as what they are about. A bank can't make crypto since you hold it in your wallet so why would you need a bank? I am sorry if maybe I missed an answer to this in a comment here but I am not quite understanding this.


That makes sense. But then the bank will most like make its own coin and not use an existing one. One where the transactions can be reversed by them. Hopefully, it is a decentralized bank owned by believers in crypto and not the usual you find in the banking system trying to get people into debt and offering you loans when you can't even afford to buy anything extra beyond the basics.

banks have no problem with bitcoin. to banks, bitcoin is just another financial asset to profit from. if people want to pervert bitcoin's purpose and deposit it at banks, they will be happy to lend it out at fractional reserve, collateralize it, securitize it, etc.

it's people who should be avoiding banks. bitcoin provides us a means to do that.

Banks can work with bitcoin, but there is a risk they will be tempted to do fractional reserve. If they don't, then naturally custody fees would need to exist. Its probably not going to have much demand, but it might entice some people in Europe that were more skeptical before.

As i have said before, banks have the opportunity to be exchanges, they could even get into lending, but it would be highly unethical if they did following fractional reserve thinking, and it will surely lead to drama later (bubbles and crashes, bankruns, etc).

Since all bitcoins always have to be accounted for, they can't really pull this off as easily as they can with fiat. The blockchain can always tell you in what wallet a coin is, and unlike fiat they just can't make bitcoin out of thin air. With fiat they can work with a fraction, because you don't care what serial your banknotes have, and you don't follow the serials of the banknotes that you deposited.

It would be better if the law somehow blocked the banks from fractional reserve practices, which might be the reason some countries treat bitcoin as asset rather than "money". You are not supposed to have fractional reserve of your gold ingots, for example...

In the end the whole world needs to adopt Austrian school economics, there is simply no other way.

that almost sounds convincing, but I get the feeling something else is going on. I mean, they do check out the viability of any service before offering it, typical fractional reserve isn't possible, unless the banks intend either to denominate the BTC in fiat (!!!) or to eventually default on their deposit obligations. The chances that defaulting debtors can actually repay BTC is so unlikely in this kind of immature market that I just can't see how it could possibly work, the collateral for the loan would need to be so secure that barely anyone would be either eligible or willing to borrow.

Other derivatives could work, but what's the likelihood they get too greedy and screw it all up?


I second the call for more sources on this story. It seems the only reason they'd really do this is: desperation. I'm sure there are at least a few Bitcoiners who got into it as gambling addicts, looking for a way to boost their money pool (and possibly to pay off some lingering debts). That's also a pretty good description of modern banking as an institution, so maybe this could be true, and that they simply can't stand the sweet smell of hot profits any longer (and have a few little cash-flow issues that need handling at the same time ;) )

Banks are allowed to hold and sell Bitcoin in 2020?

I hope that in my country banks accept bitcoin, it almost sounds convincing. but I feel something else is happening. because in my country it is said that bicoin is illegal.

I hope our government has a new policy

Those are such good news as market will get more people to invest and buying so price can grow even faster.

Bitcoin and other digital assets must not originate from the same legal entity as other banking transactions

I agree that should be a thing as banks could specify their own prices and maybe boicote the market.
Still it's awesome that more countries will get this law active for their banks as more adoptation ;)

Firstly, I want to clarify that the article information was wrong because Germany was the only EU country planning to authorize their banks to hold and sell cryptocurrency in the year 2020 while the EU governments and new rules is to create their own national cryptocurrency (https://www.ecb.europa.eu/press/key/date/2019/html/ecb.sp191126~5230672c11.en.html).

The last time I check EU was among the top countries where crypto is consider as legal tender. Although, there are some governments from there which still detest cryptocurrency but that we change once the national crypto is implement.

Thanks for the clarification. I couldn't find reputable sources that confirm that the entire EU would be allowing banks to hold crypto, but that might be because the info has been mistranslated. This is apparently what actually happened:


So the EU as a whole didn't amend the clause, Germany did.