German banks cleared to custody cryptocurrency in 2020

After three financial quarters of economic shrinkage, a recent spike in exports has seen Germany narrowly avoid a long-feared recession, allowing the Euro powerhouse some small reprieve from a year of doom and gloom.

But economists still say 2020 will be a difficult 12 months for the world’s fourth-largest economy. The triple threat of Brexit, a slowdown in world markets and international trade conflict between the US and China have all hampered Germany’s national wealth.

There is one bright light on the horizon, however.

A new law allowing legal cryptocurrency custody and sales could strengthen the market position of German banks. The financial sector is crucial to the overall health of the German economy.

Bank on it

Germany has more banks per capita than any other European country, more even than Switzerland, which is considered the banking capital of the Euro bloc.

The system is made up of around 1,900 financial institutions, some 1,000 more than any other EU state. Serving the 83 million population are around 200 private banks, 400 publicly-owned savings banks and 1,100 credit unions.

The largest of these, Deutsche Bank, is in a period of serious turmoil. Investors were reminded recently that the investment bank is struggling to stay afloat, as the bank’s leadership reluctantly told the market it was halving its overall revenue growth target to just 1% between now and 2022.

Bosses blamed the extremely low interest rate demands from the European Central Bank and the rising costs of a restructure that will see the bank shed 18,000 jobs. In reporting a €2.8bn loss for the second quarter of 2019, Deutsche said it would shrink its investment banking activities, including exiting all share trading in London and New York.

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