Germany's Crypto law Amendments fuels Crypto assets interest by Financial Institutions
The most recent Banking Act (KVG) releasing EU Money laundering Directives by Germany’s financial supervisory authority BaFin has been released early this year. These amendments came come into effect from January 1, 2020, which dictates that all the Crypto custody firms which already serve German clients should register themselves for a license before April 1 and submit the application before November 1, 2020. And most importantly, the Law also had legitimized crypto assets and ultimately the Crypto industry.
As a result, today 40 banking institutions have expressed their interest and affirmations to BaFin to enter into the business of crypto assets custody. But as the definition of the crypto assets is extensive, it can be viewed as an interest in crypto assets as well as in blockchain technology.
Germany's Crypto assets law in 2020
According to the latest regulatory laws, German banks can now store and sell crypto assets. The new law also allows the financial institutions to provide crypto custody services and to sell the digital assets.
The new law has been passed in the federal parliament and is being implemented in 16 German States. These EU Money Laundering Directives have pushed Germany into the row of one of the most pro-crypto currency countries.
The crypto-asset definition as per new legislation:
Digital representation of a value that has not been issued or guaranteed by any central bank or public body and does not have the legal status of a currency or money, but of natural or legal persons.”
On the basis of a contract/agreement or actual practice is accepted as a means of payment Or is used for investment purposes And which can be stored transmitted, and traded electronically.
Several companies are turning towards Crypto-related businesses
Due to this Crypto friendly approach, several native as well as cross border crypto-related companies are now intending to open their subsidiaries in Germany. Switzerland's major crypto storage firm Crypto Fund AG is going to offer its custodial services very soon in Germany.
Some of the firms which are already functional in Germany will continue their operations but have not yet decided about licensing themselves as per with the law. Europe's largest Crypto exchanges London-based bitstamp not yet decided to register with the BaFin.
Many international firms are waiting to see if the law can be and passported to the European Union States. A member of Germany’s parliament Frank Schaffler quoted that due to the law amendment the markets are growing faster than ever which has its pros and cons. The demand for crypto custody licenses shows that the firms are adopting blockchain technology as a result of new legislation.
The opinion of the industry experts
Most of the industry experts believe that the legitimization of the crypto assets is a progressive step towards the professionalism of the industry. The act is creating a sense of a safer environment for established firms in the financial sector. Owing to this new regulatory structure several business groups are displaying their keen interest in crypto assets custodial services. Some of them are coming up offering consulting services for the firms which are interested in applying for the license.#CryptoCustody #Blockchain #EU
CBW - External Analyst