Germany is now in line to join the growing number of EU nations providing regulation to crypto-related businesses, according to a July 24 report by the local news agency, FAZ.
Starting from January 1, 2020, Germany would usher in new EU anti-money laundering (AML) regulations that will, for the first time, require the compliance of crypto businesses.
The new regulation, as per the report identifies crypto assets as financial instruments.
With that new status accorded to the emerging asset class, businesses dealing in them, namely cryptocurrency exchanges and wallet providers would have to obtain a license to operate freely in Germany.
The said license would be issued by the country’s Federal Financial Supervisory Authority (BaFin). However, no timeline was provided regarding when crypto-business must reach compliance or face punishment from the regulatory watchdog.
Reaction to Germany’s Crypto Regulation
As you would expect, the public would usually have different opinions regarding the enactment of new rules, and the case wasn’t unusual as two officials quoted in the report had different views regarding the incoming regulations.
Bundestag Free Democratic Party Frank member Schäffler on his part insisted that forcing crypto businesses to abide by the said AML laws, and mandatory licensing would hurt innovation.
"The government is now forcing cryptocurrency trading platform providers to overrun the country and seek another location in the EU," Schäffler reportedly said.
Christian Schmies, a partner of the law firm Hengeler Mueller, was, on the other hand, pleased with the incoming rules. According to him, it would allow institutional participation in the crypto space.
“The technology has not yet been accepted by institutional investors because a reliable legal framework is missing,” said Schmies who at the same time called for more regulatory clarity.
Meanwhile, in another news from the German crypto space, Stmarket.co reported yesterday that BaFin approved a €250 million token offering by blockchain startup, Fundament.