Bitcoin(BTC) and cryptocurrencies are now legal financial instruments in Germany, according to the new guidelines issued on Monday by the country’s Federal Financial Supervisory Authority (BaFin).
BaFin which serves as Germany’s financial regulator, has expanded its definition of financial instruments to include all kinds of digital assets from its previous definition which covered only security tokens.
Announced in a press release, BaFin described crypto as follows:
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.
According to BaFin, this new classification is inline with inter-government agencies like the Financial Action Task Force (FATF), and adoption of changes to Germany’s Bank and Payment Act.
Additionally, the new guideline says crypto custodian companies will apply and receive license from the regulator to offer their services in the country on or before March 30, 2020 to November 2020.
BaFin further provides a clear definition of what constitutes a crypto custodian firm thus:
“The legal facts of the crypto custody business are fulfilled by custodians who take crypto values into care as a service for third parties. This primarily includes service providers who store their customers’ crypto values in a collective inventory without the customers themselves being aware of the cryptographic keys used.”
It will be recalled that the regulatory body had received crypto custodial license applications from over 40 banks in Germany, as the country’s financial institutions tango with the crypto industry.
Germany’s second largest stock exchange – Boerse Stuttgart also recently launched a new inverse Bitcoin Exchange Traded Product (ETP) last week, as crypto adoption continues to soar in the country.
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