The new federal government names crypto in the coalition agreement

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The new federal government cited crypto in its coalition agreement and advocated a level playing field between traditional finance and “innovative business models”.

This week, three German parties agreed on a coalition agreement in which left-wing Social Democrats (SDP), the Greens and the right-wing Free Democrats (FDP) will take the reins from December this year.

According to a rough translation of the 177-page agreement published on November 24th, the coalition is calling for a new “dynamic in relation to the opportunities and risks of new financial innovations” such as crypto assets and blockchain deals:

“We are making European financial market supervisory law fit for digitization and for complex corporate structures in order to ensure holistic and risk-adequate monitoring of new business models.”

“We need joint European supervision for the crypto sector. We oblige providers of crypto asset services to consistently identify the beneficial owners, ”the agreement says.

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

The coalition formation lasted two months after the federal election on September 26th and marks the end of the 16-year reign of Angela Merkel as Chancellor, who is retiring and will be replaced by Olaf Scholz from the SDP.

Crypto is advancing in the EU

In other parts of the continent, the European Council – which leads the EU’s political agenda – passed two proposals called the “Regulation on Markets in Crypto Assets (MiCA)” framework and the “Digital Operational Resilience Act” (DORA).

In particular, MICA – originally designed by the European Commission in September 2020 – aims to create a “regulatory framework for the market for crypto assets that supports innovation and exploits the potential of crypto assets”. Although it has yet to be ratified by the European Parliament, if passed it will be subject to stricter requirements for issuers of crypto assets, but non-fungible tokens (NFTs) and utility tokens do not fall within the scope of the regulation.

Related: EU central banks are working on DLT-based wealth accounting

In a comprehensive contribution by the user “BelgianPolitics” in the r / CryptoCurrency subReddit on November 26th, the progressive regulation proposal was described as “the most important one for the entire crypto industry so far”.

The Redditor’s analysis has nearly 900 comments at the time of writing and provides a detailed overview of the proposed laws in MICA. The author emphasized the importance of the suggestions:

“These rules must be followed by every company operating in the European Union. However, because of the “Brussels Effect”‘There is a very good chance that these rules will eventually become international standards. While everyone is focused on the US and China, the EU is casually moving forward, ”said BelgianPolitics.