cryptovibes.com
Two months after Germany’s general election, three political parties have agreed that the forthcoming coalition government will be implementing regulation for the crypto blockchain industry.
The three parties, the Free Democratic Party (FPD), the Alliance 90/The Greens, and the Social Democratic Party of Germany, stated that the country needs a ‘comprehensive digital awakening to maintain its economic competitiveness.
The new proposal is also in line with the statement credited to Mark Branson, the new Head of Federal Financial Supervisory Authority (BaFin). The regulator’s reputation was slightly battered after the collapse of payments giant Wildcard last year.
The Policy Will Help To Reduce Crypto Risks
The three parties are in agreement over the opportunities presented by the current digitization in finance. They also want to look into the risks in the new financial innovations, especially in blockchain businesses and crypto-assets.
According to the parties, the new regulation will ensure a risk-adequate and holistic supervision of the new business models. In line with that, they are seeking joint European supervision that will take care of the risks in the crypto sector.
However, the supervisory authority is not only looking at taking care of the financial sector. The regulation will also put things in place to prevent the increasing use of cryptocurrencies for terrorism financing and money laundering.
Scope Of Regulation Excludes NFTs
Two proposals have already been adopted by the European Council, namely the “Digital Operational Act” and the Regulation on Markets in Crypto Assets (MiCA).
The MICA proposal was first drafted by the EU in September 2021. They will be creating a regulatory framework that will be supporting innovation within the crypto sector. However, it’s not clear whether the proposal will be executed as it still needs to be approved by the European Parliament. When approved, it will provide more stringent requirements for crypto-asset issuers.
But the scope of the regulation does not include utility tokens and non-fungible tokens (NFT). Several analysts and crypto enthusiasts have lauded the proposal, with some calling it the “most important one to date for the entire crypto industry.”
Blockchain technology has drawn massive interest over the past few years. The forthcoming German government is also serious about investments in distributed ledger technology (DLT) and artificial intelligence to remain relevant in the rapidly evolving digital space.