Germany’s new government puts cryptocurrencies in the spotlight

Germany’s new government has introduced a cryptocurrency bill that, for the first time, mentions cryptocurrencies and blockchain, the technology among the pillars that will support the country’s development over the next four years.

The governing coalition is made up of Center-Left Social Democrats (SPD), Greens and Free Democrats (FDP).

The biggest point, at least for crypto enthusiasts, is the country’s digitization ambitions.

Germany focuses on tokenized stocks and funds.

The new government is committed to creating a digital state and developing new strategies for cryptocurrencies and blockchain technology.

“We need a new dynamic regarding the opportunities and risks of new financial innovations, crypto assets and business models,” the document reads. “We advocate for a level playing field with a level playing field within … [European Union], between traditional and innovative business models and towards large digital companies. “

A notable paragraph of the agreement, as the FDP’s Frank Schäffler pointed out, includes the provision allowing the issuance of tokenized shares.

“Digital financial services must operate in a transparent manner, therefore, we will create the legal framework and the possibility of expanding the issuance of electronic securities to include shares,” the document reads.

“The coalition agreement is clear: after authorizing the tokenized funds, the next step will be tokenized shares. This will dramatically accelerate blockchain adoption, ”said Sven Hildebrandt, CEO of Hamburg-based Distributed Ledger Consulting (DLC).

The new coalition government also agreed that Germany should become one of the main European sites for FinTech and InsurTech platforms, as well as consumer-oriented financial applications, known as ‘neo-brokers’, which allow trading of stocks and shares. other investment options.

Furthermore, the new government has stated that it intends to “constructively support the process of introducing a digital euro as a complement to cash, which is accessible to all as legal tender in Europe and can be used in general. “

Be on the lookout for European regulations

This new approach to the digital asset space in Germany is likely to influence the overall policies of the European Union.

On Wednesday, the European Council adopted two cryptocurrency regulatory proposals: the Crypto Asset Markets Regulation (MiCA) and the Digital Operational Resilience Act (DORA).

“MiCA’s goal is to create a regulatory framework for the crypto market that supports innovation and harnesses the potential of crypto assets in a way that preserves financial stability and protects investors,” the European Council said.

The new rules have yet to be ratified, but they are likely to become the standard EU regulatory framework.

The new coalition government has said it supports the idea of ​​an independent European regulator that specifically focuses on combating money laundering and terrorist financing, in both traditional finance and cryptocurrencies, ensuring there is no anonymity for users. .

Such an authority, according to the agreement, should be based in Frankfurt am Main, one of the largest financial centers in the world and the headquarters of the European Central Bank.

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