Germany’s financial regulator Bafin has released guidelines classifying cryptocurrency as financial instruments. This move further expands the definition of financial instruments to include all kinds of digital assets with the previous paradigm only covering security tokens.
In a press release issued Monday, the German Federal Financial Supervisory Authority (BaFin) described crypto as:
[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 the regulator, its new crypto classification echoes the guidelines of intergovernmental agencies like the Financial Action Task Force (FATF). The news marks the second landmark crypto classification to emerge in the last few days. Recently, an Australian Judge ruled that crypto is an investment vehicle. This means that digital currencies can be used as collateral in the country.
BaFin’s new crypto classification announcement is also part of the move by the country to adopt the fifth EU Money Laundering Directive (AMLD5) which began on January 1, 2020.
Also, crypto custodian already registered in other EU nations cannot “passport” their operating license to Germany. Instead, such platforms must apply for approval to offer crypto custody services in the country.
Earlier in February 2020, Kryptomoney reported that BaFin received crypto custodial licensing applications from no fewer than 40 banks. Apart from banks, the country’s stock exchange is also significantly involved with the crypto market as Boerse Stuttgart. This Germany’s second-biggest stock exchange recently added a new inverse Bitcoin Traded Product (ETP).
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