Saturday, August 13

New German Government Cites Cryptocurrencies in Coalition Deal

The new German government has cited cryptocurrencies in its coalition agreement, advocating a level playing field between traditional finance and “innovative business models.”

Three German political parties agreed to a coalition agreement this week that will see the Left Social Democrats (SDP), the Green Party and the Free Democrats (FDP), supporters of the right, take the reins from December this year.

According to an approximate translation of 177 pages agreement Posted Nov. 24, the coalition calls for a new “dynamic regarding the opportunities and risks of new financial innovations,” such as crypto assets and blockchain businesses:

“We are adapting the European financial market supervision law to digitization and complex group structures in order to ensure holistic and risk-appropriate supervision of new business models.”

“We need a joint European supervision for the crypto sector. We force crypto asset service providers to constantly identify beneficial owners, ”the agreement adds.

The document states that the EU supervisory authority must “not only take care of the traditional financial sector, but also prevent the misuse of crypto securities for money laundering and terrorist financing.”

The coalition formation reportedly took two months of negotiations after the German federal elections on September 26, and marks the end of Angela Merkel’s 16-year reign as chancellor who is retiring and will be replaced by Olaf Scholz of the SDP. .

Cryptocurrencies make progress in the EU

Elsewhere on the continent, the European Council, which guides the EU’s political agenda, adopted two proposals called ‘Regulation on Crypto Asset Markets (MiCA) structure and the ‘Digital Operational Resilience Act’ (DORA).

MICA in particular – initially drafted by the European Commission in September 2020 – objectives to create a “regulatory framework for the cryptoassets market that supports innovation and harnesses the potential of cryptoassets.” While it has yet to be ratified by the European Parliament, if enacted, it will subject issuers of crypto assets to more stringent requirements, but non-fungible tokens (NFTs) and utility tokens will remain outside the scope of regulation.

Related: EU central banks work on DLT-based asset settlement

In a wide mail From user “BelgianPolitics” on r / CryptoCurrency subReddit on November 26, the progressive regulatory proposal was labeled “the most important to date for the entire cryptocurrency industry.”

Redditor’s analysis has nearly 900 comments as of this writing and provides a detailed summary of the proposed laws in MICA. The author emphasized the significance of the proposals:

“These rules must be followed by all entities that operate in the European Union. However, due to the ‘Brussels effect, ‘there is a very good chance that these rules will eventually become international standards. While the whole world is focused on the US and China, the EU is casually leading the way, ”BelgianPolitics said.