Many governments have been cautious of the cryptocurrencies and the technology as it has opened doors to unexplored areas where illicit actors are operating.
However, the German federal government categorizes digital cash as something that does not pose a threat to its financial balance. The reason behind the statement is the fact that the number of transactions that the crypto market conducts doesn’t come close to the dealings in the global financial industry.
According to the Federal Government, volume of crypto asset transactions is too low compared to the size of the global financial system to pose a serious threat to the current financial system. However, the German government considers it appropriate to closely monitor developments in this area at the G20 level. According to the Federal Government, this assessment is shared within fellow G20 countries.
However, there are security concerns surrounding money laundering, funding of terrorist organizations, online gambling, and other forms of illegal revenue that are being prepared to be studied in a national risk analysis assessment project expected to be completed sometime next year.
The government said,
“In order to address the risks associated with Bitcoin and other cryptocurrencies, there are already important regulations in Germany: for example, German-based crypto traders must follow the same anti-money laundering regulations as other financial service providers – especially when it comes to identifying customers,”
The Federal Government also noted that permission from the Federal Financial Supervisory Authority (BaFin) is necessary for the commercial trade of cryptocurrency. The government also emphasized the importance of international controls in the crypto sphere.
“There is a need for coordinated action at European and international level. The Federal Government is therefore pressing for a harmonized handling of crypto-tokens at European and international level.”
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