Europe’s New AML Rules Attracting More Institutional Investors to Crypto: Börse Stuttgart Exec
March 12, 2020
An executive of Börse Stuttgart, a stock exchange in Germany, has pointed out that the latest AML regulations in Europe are helping to attract more institutional investors to the cryptocurrency space.
AMLD5 Attracting More Crypto Investors
The chief digital officer at Börse Stuttgart, Dr Ulli Spankowski, is of the view that the latest anti-money laundering (AMLD5) regulations, put in place by the EU, are helping to attract institutional investors to the cryptocurrency space. However, the increasing interest is something they didn’t expect.
The Börse executive made this statement while speaking at the CryptoCompare Digital Asset London conference on Tuesday, March 10, adding that he is surprised by the positive effects the new regulations are having on cryptocurrencies by attracting more institutional investors.
Spankowski stated that he didn’t think there would be much interest because banks and other financial institutions could offer crypto custody and crypto trading services. He added that they now see an increasing interest from the traditional investors since the regulation came into effect.
According to the AMLD5, cryptocurrency exchanges operating within the EU are required to register with the local regulators, roll out the know-your-customer (KYC) policies, and hold information on clients’ source of funds.
However, it hasn’t completely been positive since the regulation came into effect. Some regional cryptocurrency players announced plans to exit the EU after the new directives came into effect earlier this year. Options exchange Deribit moved its headquarters from the Netherlands to Panama, stating that the requirements of the AMLD5 possess too much barrier for most of its clients. They were followed by non-custodial exchange KyberSwap, which moved its headquarters from Malta to the British Virgin Islands.
Börse Stuttgart is planning to become a major player in the cryptocurrency space over the coming year. The company had listed a few cryptocurrency financial products on its main trading platform. Interestingly, they ventured into the cryptocurrency space in September last year when the subsidiary, Börse Stuttgart Digital Exchange (BSDEX), introduced a Bitcoin-Euro (BTC/EUR) spot trading pair.
Spankowski believes that cryptocurrencies are not bad nor illegal, as long as they are appropriately regulated. He stated that digital currencies are important and that once the regulator gives you license to operate, it must mean they are legit.
The reputation of Börse Stuttgart Digital Exchange continues to grow within Europe. BSDEX now has over 120 institutional clients and maintains an open relationship with the chief German financial regulator, thus, allowing the company to operate as a trusted gateway for the cryptocurrency asset class.
Spankowski is confident that Börse Stuttgart could open the gates to cryptocurrency institutional investment in Europe. He stated that they could be the gate opener for digital currencies since other institutions in the traditional financial industry are already connected to the exchange on a European scale. Spankowski believes that this is the sweet spot of the BSDEX.
The cryptocurrency space continues to undergo changes in Europe and other parts of the world. Regulatory agencies all over the world are working on rolling out guidelines and directives that would curtail the financial crimes carried out with cryptocurrencies and would boost innovation and creativity within the sector. In terms of regulation, it would be interesting to see how the cryptocurrency sector will evolve over the coming years.