The financial watchdog the German Federal Financial Supervisory Authority (also known as BaFin) has issued guidance in which clarified the status of digital assets.
According to the regulator’s definition, cryptocurrencies and other digital assets are a “digital embodiment of value,” which has the following characteristics:
- Not issued or guaranteed by any financial institution, central bank or authority;
- Not always tied to a legally recognized currency;
- No legal status of currency or money;
- Accepted as a means of settlements by individuals or legal entities;
- May be transmitted, stored or exchanged in electronic form.
As the watchdog explained, the definition of digital currencies is consistent with the definitions of other regulators, including the Financial Action Task Force on Money Laundering (FATF), which served as the basis for the new classification. Prior to this, cryptocurrencies did not fall into any of the generally recognized categories, BaFin clarifies.
At the beginning of the year, Germany updated the rules in the field of combating money laundering, establishing mandatory licensing of crypto-custodian companies. Industry participants who already provide such services will not be fined if they declare their readiness to undergo licensing by March 31 and submit an application by November 30.
Earlier iHodl reported that a German politician serving as Federal Minister of Finance and Vice-Chancellor Olaf Scholz called for the creation of a digital euro coin.