Germany saw its new fund allocation law officially go into effect Thursday, which could theoretically spark up to $415 billion to flow into the crypto sector. Germany's Fund Location Act was introduced in April and approved by the parliament shortly after, and the statute permits "Spezialfonds" or special funds to invest as much as 20% of their portfolios in crypto assets. If every German special fund chose to allocate the full 20% of their portfolio in crypto, that would equate to a whopping €350 billion or $415 billion, based on the current total assets under management of funds in Germany. Special funds are the dominant institutional investment vehicle in Germany, which as a leader in the eurozone could encourage other European countries to follow.
Here is the rest of the week in review:
Coinbase (NASDAQ: COIN) introduced plans for a new high-yield savings account based on USD Coin (USDC), a stablecoin governed by the major exchange and Circle via the CENTRE Consortium. Coinbase asked its customers to "pre-enroll" in order to earn interest on USDC at an annual yield of 4%, touted as much higher than bank rates. Coinbase also asserted that customers' USDC deposits are guaranteed by Coinbase, giving extra peace of mind. Coinbase also took a shot at stablecoin lenders like Abra and BlockFi, noting that their customers may find assets "loaned to unidentified third parties and subject to their credit risk, which could result in a total loss of your crypto holdings." In contrast, Coinbase praised its savings product as a "safe, secure way to earn." Users will be able to monitor their interest grow in real-time through the lifetime rewards ticker and receive monthly payouts without fees or withdrawal limits. Coinbase will notify its customers when they come off the waitlist and can earn high-yield interest.
Vietnam is attempting a cryptocurrency pilot program, after Prime Minister Pham Minh Chinh asked the State Bank of Vietnam to pilot a cryptocurrency implementation from 2021 until 2023, according to local reports. He recently signed the "Decision No.942/QD-TTg" that approves the Asian country's e-government development strategy, which will assess artificial intelligence, big data, augmented reality, virtual reality, and blockchain technology. The Institute of Innovation under the University of Economics HCM City explained that the crypto pilot program aims to help the government find the pros and cons while developing an appropriate management mechanism. The move comes after the central bank in 2018 prohibited commercial banks and payment service providers from transacting with crypto, arguing that it could increase the risk of money laundering, terrorism financing, and tax evasion. But now cashless payments are growing in Vietnam, and the central bank's potential recognition of digital currencies would help boost the adoption process.
Crypto prices edged up to $1.47 trillion this week, as Bitcoin (BTC) and the overall market remain range bound. For the majors, all except stablecoins ended in the green, with Uniswap (UNI) and Ether (ETH) posting outsized gains. In the top 100, the biggest losers were Theta Fuel (TFUEL), down 7.5%, THETA, down 2.8%, and Quant (QNT), down 2.4%. The biggest gainers were Compound (COMP), up 88%, XinFin Network (XDC), up 76%, and Elrond (EGLD), up 46%. Next week traders will watch if crypto stays within the recent range or breaks out.
The author owns a small amount of BTC.