The recommendation was made following the AMLD5 ( fifth EU Money Laundering Directive) which rolled early this year. Interestingly, AMLD5 will also have an impact on Germany’s Banking Act and Payment Supervision Services Act. Noticeably, in a press release officially released on March 03, Bafin notes that;
“[A] digital representation of a value that has not been issued or guaranteed by any central bank or public body and is not necessarily linked to a currency specified by law and that does not have the legal status of a currency or money, but is accepted as a medium of exchange by natural or legal persons and can be transmitted, stored and traded electronically”
It was also noted that the new classification that BaFin provides also complies with the guidelines shared by intergovernmental agencies such as FATF (Financial Action Task Force). However, what’s more, interesting is that the agency also recommended crypto custodial platforms.
While Bafin considers crypto custodial providers like financial institutions, it also states that these platforms must obtain a license to continue operating their businesses in the country. More so, it also notes that platforms operating within the country without a license are advised to secure one by the end of November 2020. However, these platforms should also ensure their readiness to apply for a license by the end of this month.
What’s more, the platforms which are operating in other regions should apply for a new license to operate their business in Germany and cannot passport the license of other countries to Germany.
In a nutshell, Germany appears to be a crypto-friendly regulatory region. Consequently, as soon as the country hints its upcoming plan in January, reports rolled the next month, February, noting that almost 40 banks have applied for the license. Besides, stock exchanges including Germany’s second-largest stock exchange, Boerse Stuttgart also showed interest in the crypto ecosystem.