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- The European Union (EU) is in a situation where they have no other option than to treat cryptocurrency giants to be obligated under the new money laundering law.
- The directive has played a significant role in transforming the regulatory policies associated with cryptocurrencies.
- These authorities have decided to take action, keeping in mind the potential of cryptocurrencies to change the course of financial transactions in the future.
As a result of the new European Money Laundering Directive, which came into force on January 1, 2020, the European Union (EU) is in a situation where they have no other option than to treat cryptocurrency giants to be obligated under the new money laundering law.
However, some nations like Germany have taken the present situation as a boon to extend and expand its regulatory framework to monitor and supervise these giants in their country. Thus, the directive has played a significant role in transforming the regulatory policies associated with cryptocurrencies.
Previously, laws associated with cryptocurrency transactions in Germany focused on allowing the providers to offer a wallet service to its stakeholders. However, the same shall be accompanied by a license granted by the Federal Financial Supervisory Authority (BaFin) as regulatory policy.
Apart from that, a license is provided to banks which are required to provide additional subsidiary to initiate the service related to cryptocurrency platforms like Ethereum, Bitcoin, Ripple, etc.
Presently, the new Law has made several changes regarding the licenses provided to the banks with respect to services connected to cryptocurrency platforms. Consequently, according to a recent report, BaFin has already received around 40 applications from various banks across the nation with regard to custody-related policies embodying cryptocurrency platforms.
Among these applications, Solarisbank is the only institution, who’s name has been disclosed. The bank is popular for its crypto exchange platform known as Solari’s digital Assets, a subsidiary of the said institution. The custodial application is aimed at providing a lien on various crypto assets on behalf of the customers dealing with the bank.
Many higher authorities have recommended the implementation of the present Law, as they believe that it is high time to monitor the crypto assets, by proper monitoring procedures and principles. These authorities have decided to take such an action, keeping in mind the potential of cryptocurrencies to change the course of financial transactions in the future.
Awareness and Recognition
These reports also underline, Germany’s potential to be recognized as an important player in the crypto market. This assumption is based on the country’s prudent regulations associated with the said sector. These regulations apparently provide the location with a unique selling proposition that can attract serious providers to them.
Thus such a law will ensure the position of Germany as a core member in the EU to handle the digital market. Apart from such protective mechanisms will attract various giants to invest in the crypto market with surety and confidence.
Which again emphasizes the continuous adoption of blockchain technology by various institutions to facilitate their day to day task efficiently and safely. This mechanism must be an appropriate role model for different nations across the globe to increase the attention on safety policies and mechanisms.
However, several countries have not achieved the leap of crypto transactions. These countries still depend upon traditional methods of the exchange system. But once they are into the arena, such mechanisms must be preliminarily adopted as soon as possible.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
