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    Victoria O.

    Watchdogs: Cryptocurrency Regulation in Germany

    Germany crypto regulation

    Germany is a country that is the main donor of the European economy and the main player in the arena of the entire European Community. Let's find out what's going on with cryptocurrencies.

    In this article, we will discuss such important topics as German crypto rules, Cryptocurrency in Germany, and Cryptocurrency legal in Germany

    Is Cryptocurrency Legal in Germany?

    Germany became one of the first EU countries that decided on the regulation of the cryptocurrency industry and the status of bitcoin at the government level.

    The conversion of fiat currencies into bitcoins will not be taxed, but the manager of the enterprise must document the Internet resources that he uses to determine the exchange rate of the first cryptocurrency in real-time.

    It is worth noting that BMW does not intend to regulate the mining industry. The agency emphasizes that the extraction of new bitcoins by manners is not a payment for their work, since it is impossible to determine the final consumer in this case.

    Transaction fees that the miner receives from other users are paid voluntarily and are not directly related to the miner's activities, officials say.

    After all this information, there is a clear answer to the question about Cryptocurrency legal in Germany. But let's dig into this one again

    Attitude to Cryptocurrencies

    Germany was one of the first to launch legal regulation of the legal cryptocurrency in Germany in order to give it legitimacy.

    German legislation does not have a general ban on cryptocurrencies. However, regulatory requirements for licensing and emissions may apply. There are some obstacles that can be overcome if the relevant legal requirements are met.

    Germany is one of the first countries in Europe that paid attention to cryptocurrency and achieved at least some legitimacy. The legal regulation of cryptocurrency in Germany began in 2013 by a decree of the Minister of Finance. Bitcoin has been defined as a unit of account, which can be used in private trade relations.

    However, the cryptocurrency itself has not received the status of a foreign or electronic currency, but has received the definition of "private money”. This suggests that it is possible to make transactions with cryptocurrency privately, but there is still no regulation at the interstate level.

    Actions Under the Law

    Have you ever thought about German crypto rules? If not, then it's time. Let's discuss Germany's crypto rules. Since 2017, after updating the national regulatory framework, the German federal government has defined Bitcoin as a "financial instrument"

    The recent record-high cryptocurrency should make supervisors act. Germany could be considered a role model. A Europe-wide solution would also have a great advantage.

    As a first step, there must be well-thought-out regulation at the EU level. Some proposals from the EU Commission are already in place. The European Single Market is the largest economic area in the world. Where, if not here, can a common approach be found in dealing with Bitcoin and Co.?

    In fact, Germany offers initial approaches to this. Although often decried as a digital desert, the Federal Republic of Germany is quite a pioneer in terms of crypto regulation in some respects: As early as 2013, Bafin classified Bitcoin as a financial instrument, comparable to foreign exchange.

    Further ground-breaking steps are the German Crypto Custody Act, the planned Electronic Securities Act, and the amended Money Laundering Act of 2020, according to which companies that offer services around digital assets need appropriate official permission. Of course, all this is not yet perfect. For example, one would urgently have to tackle the issue of speculative gains: All price gains are still tax-free after one year. Germany crypto rules are not so cruel, but they are still perfectly observed

    No Legal Certainty Without Regulation

    A Europe - wide regulatory solution would also have a big economic advantage: crypto and blockchain companies want regulation, as the past shows. Because without clear framework conditions, there is no legal certainty and the risk of suddenly being deprived of the business basis or even being put in a corner with money launderers and terrorism supporters.

    This is precisely why there will be no global deregulation race. The trend is for different countries with industry-friendly regulations to compete for companies that are looking for the right location for their business. But the greatest attraction to reputable companies will not be those places that promise the least regulation on crypto issues, but those that can ensure the most meaningful.

    For so far, states in the regulatory handling of cryptocurrencies usually proceed according to one of two options: The first group of states, so far the majority simply does nothing and largely ignores Bitcoin and Co. It includes many developing and emerging countries.

    But this is negligent. Enormous sums of money in the form of digital currencies are now not only in circulation worldwide but in parts already closely intertwined with the traditional financial system

    The content of this article is for informational purposes only and should not be construed as investment advice. We ask you to do your research.