The Federal government has on 31. July 2019 decided depositaries for digital assets – the so-called crypto-values – from 1. January 2020, the financial supervision bodies. The far-reaching consequences of this decision, and what opportunities and risks arise for the FinTech location Germany, commented Dr. Sven Hildebrandt of the DLC Distributed Ledger Consulting GmbH.
By Dr. Sven Hildebrandt
At the 1. August 2019BTC$10.028,00 0.76%part Facebook Twitter LinkedIn xing mail
Bitcoin regulation: A guest post by Dr. Sven Hildebrandt
The government’s draft confirmed what since the first draft of the implementation act for the 5. Directive on money laundering was to be expected. Germany is in the regulation of digital assets from the other EU member States and companies, the virtual access key for investors to manage (so-called Wallet Provider), in the future, by the German Federal financial Supervisory authority (BaFin) monitor.
in the absence of the competent Supervisory authority and the requirements of both the technical infrastructure as well as compliance with appropriate risk management and compliance processes of this digital depositories, for example, by external service providers is so far not guaranteed. This circumstance deter institutional investors, who must meet strict regulatory requirements. This has now come to an end: From 1. January 2020 require depositaries for crypto-values [Bitcoin Exchange] approval of the BaFin.
the Depositary, the exercise of this activity to date and an approval seeking, need to do this, the BaFin of up to 1. February 2020 view in writing and the request to 30. June 2020 submit.
regulation of Bitcoin & co. is taking shape to
Matthias Winter, for the DLC Distributed Ledger Consulting in the financial market supervision law, noted:
it is Surprising and at the same time, very commendable, and that the authorisation may be requested according to the draft law, only exclusively on the safekeeping of digital assets [such as Bitcoin] specialist service providers. Already on the market operating financial service providers are not able to extend your license is easy, but have to rely on Outsourcing to specialised units.
in other words: The regulators have recognized that it is not the technological equipment and innovative power of the traditional institutions has not always the Best – and just technique at this point is of fundamental importance.
FinTech companies coming from the Bitcoin world, are established players in terms of this sophisticated technology are actually always superior. You are not equipped, however, but as a smaller company with departments for Compliance, risk Management and Regulatory requirements. The affected market participants with a more complex learning process in Germany now, in dealing with the requirements of the financial regulator.
A reasonable solution could be, in our opinion, to choose a similar approach as in the case of Asset managers and investment companies – the keyword is ‘Service-KVG’. By outsourcing certain aspects to administrative specialists at both the supervision as well as the FinTechs itself would have helped.
Overall, the government’s draft, the opportunity to position Germany as an attractive market for digital investments with high safety and supervision standards. Noteworthy in this connection is that the Federal Finance had announced that the Ministry together with the Federal Ministry of justice and consumer protection in may, to make way for digital bonds free. The Calls from industry and policy, the digital creation of limited liability Companies and trading GmbH-enable shares on digital platforms to be louder.
In addition, it is assumed to be in the [Bitcoin]scene, expect to be tokenized shares and shares of the Fund will come very much sooner than many market participants expect the so far – a development that even the powerful and the Bundesverband Investment and Asset Management strongly supports. Against this Background, the structure of a temperate, regulated infrastructure for the safekeeping of digital capital market instruments appears as the next logical step. It will be crucial, what are the specific requirements to the depositaries, the financial supervision will develop in the next few months.
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