Cryptocurrencies Recognized As a Financial Instrument in Germany

The Federal Financial Supervisory Authority (BaFin) of Germany has issued a guidance to clarify the status of cryptocurrencies and determine the rules that should regulate them. The guidance was based on the current legislation of the country.

This guidance applies to crypto custody service providers operating in the territory of the republic. Germany currently believes that service providers that offer digital currency exchange for legal tender are financial services institutions. Cryptocurrencies are considered as financial instruments. They can be accepted as a means of exchange of individuals and legal entities, transferred, stored and sold in electronic form. Coins and tokens now have the rights of traditional securities.

Now crypto companies must apply for a license at BaFin by the end of November 2020. To date, more than 40 financial institutions have announced their intention to offer services related to cryptocurrencies and to carry out their activities in accordance with the updated legislation of the country.

Image courtesy of Reuters