Crypto in Germany: Government and Ministry of Finance are slowing down opportunities!

Crypto in Germany: Government and Ministry of Finance are slowing down opportunities!

Germany as a crypto location is currently facing significant challenges. While the federal government largely ignores the area of ​​cryptocurrencies, there are significant braking factors from the Federal Ministry of Finance. Current analyzes show that Germany lags behind other countries internationally when it comes to promoting blockchain technology and the general business climate for crypto companies. Loud BTC ECHO Industry players fear that incomplete regulation and a lack of political support will hamper progress.

The industry also faces international competition, which is intensified by aggressive government funding strategies in other countries. This leads to many crypto startups turning their backs on Germany or not settling here at all, which endangers the innovative strength and growth potential of the sector.

New EU regulation for crypto services

A bright spot could be the new Cryptocurrency Markets Regulation (MiCAR), which came into force on June 29, 2023. This regulation creates a uniform legal framework for crypto transactions in the EU. It will become a reality for many countries, including Germany, even if some regulations will only be applicable from June 2024. According to information from SBS Legal Crypto investment advice is already regulated in Germany and requires a BaFin license.

The MiCAR Regulation requires crypto service providers to meet strict requirements, particularly regarding business organization and the qualifications of business managers. People with criminal records for money laundering or terrorist financing are prohibited from offering such services.

Crypto provider requirements

• Erstellung spezieller Kundenprofile zur Erfassung finanzieller Verhältnisse, Kenntnisse und Risikobereitschaft.
• Regelmäßige Überprüfung der Kundenprofile alle zwei Jahre.
• Dokumentation von Beratungen durch ein Protokoll, das Erwartungen und Empfehlungen festhält.
• Transparente und unparteiische Beratung, ohne versteckte Provisionen.

An attractive element of MiCAR is that companies can obtain a one-time permit that is valid in all EU member states. This means that companies that quickly familiarize themselves with the new regulations can gain a competitive advantage. However, it remains to be seen whether the German authorities will use these opportunities to make Germany more attractive as a crypto location again.

In summary, while Germany is taking fundamental steps towards regulation, it still has a lot of work to do to remain competitive in the international crypto market. It is now up to the federal government to take the industry's signals seriously and work proactively on solutions so as not to further endanger the innovative strength in the crypto sector.