The German financial regulator has released instructions for classifying cryptocurrencies into financial instruments. The move continues to expand the definition of financial instruments to include all types of digital assets, while the previous framework only included security tokens.
Germany clarifies classification of cryptocurrencies in Germany
In Press Release Released on March 2, the Federal Financial Supervisory Authority (BaFin) described the cryptocurrency as:
"A digital representation of a value that has not been issued or guaranteed by any central bank or public agency, and is not necessarily tied to a currency prescribed by law. and has no legal status of currency or money, but is accepted as a natural means of exchange or legal entity and may be transferred, stored and electronically traded. "
According to BaFin, this new category repeats instructions from government agencies such as the Financial Action Task Force (FATF). This news marked a landmark cryptocurrency classification for the second time in the past few days when an Australian judge recently ruled that cryptocurrencies are a means of investment – meaning that cryptocurrencies can used as collateral in the country.
BaFin's new crypto classification announcement is also part of its move to apply the EU's Fifth Money Laundering Directive (AMLD5), which began on January 1, 2020. As previously reported, part of the AMLD5 application process relates to changes to the Bank Services and Payment Supervision Act of Germany.
Regarding depository of cryptocurrencies
As part of FaFin's new cryptocurrency guide, cryptocurrency depository service providers will need to have a license issued by a local regulatory authority. Crypto depository platforms that have operated in the country without a license should be ready to do so by March 30, 2020.
In addition, the unit noted that cryptocurrencies registered in European Union countries will not be legally valid to operate in Germany. Instead, such platforms must apply for approval to provide cryptocurrency note services in the country.
In early February 2020, reports emerged that BaFin had received applications for a license to deposit electronic money from no fewer than 40 banks. In addition to banks, the national stock exchange is also heavily involved in the cryptocurrency market when Boerse Stuttgart – Germany's second largest stock exchange, has added a Swap Exchange Product ( ETP) New Bitcoin.
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According to Bitcoinist
Translated by ToiYeuBitcoin