MINDSMITH, a tech think tank, OnGrid Systems, blockchain and decentralized finance platforms developer, DEKIS, an interdisciplinary research group of the Catholic University of Ávila, and Tiger.Trade, an international trading platform, conducted a survey of experts and representatives of investment funds present in the German-speaking region of Europe, timed to coincide with the introduction of the new Fund Location Act. Starting from August 2, 2021 domestic special funds are allowed to invest up to 20% of the assets under management into crypto assets such as Bitcoin.
1. Around 88% of DACH-focused funds are not currently investing in digital assets, however, almost half (46%) of DACH-focused funds are interested in one way or another in digital assets and are ready to study the issue. 7% of respondents are currently at a late planning stage and are considering investing in the digital assets market in the course of 2021. Only 4% currently invest or include digital assets in their portfolio. New regulations and introduction of central bank digital currencies (CBDCs) and Digital Euro will accelerate the adoption.
2. Regulatory uncertainty has become a key barrier to investment in digital assets for the majority (86%) of DACH-focused funds. However, it is at the current moment that the market is witnessing significant progress in this area. Regarding the lack of service providers and the availability of infrastructure, which became a barrier for 57% of respondents, the market has also seen significant progress on the part of regulators recently.
3. Up to 14% of the respondents are interested in the deсentralized finance (DeFi) solutions. It might open up a window of opportunity at the intersection of blockchain and CBDCs. The big question is: what stablecoins will act as a basis for the regulated DeFi ecosystem? Chances are high that digital euro in addition to digital dollars, digital yuan and other CBDCs will do the job.
The report is available for download: https://mindsmith.io/en/investment-study-dach/
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