- The cryptocurrency startups in the country faced denial of services from the banks after German banks permission to make transactions with Bitcoin has been dismissed.
- The German Federal Financial Supervisory Authority (Bafin) received a request from about 40 banks in the country seeking the allowance of transactions to be made with Bitcoin.
Bitcoin is a cryptocurrency that doesn’t involve the banks or administration for the transactions to be made and relies on the blockchain technology. It is the first cryptocurrency and the most successful one all over the world.
In the start of this year, The German Federal Financial Supervisory Authority (Bafin) received a request from about 40 banks in the country seeking the allowance of transactions to be made with Bitcoin. It was reported that the German banks were not just ready to begin the processing of transactions with BTC and other coins but were ready for the provision of cryptocurrency storage services. But however, the cryptocurrency startups in the country were denied the grant of services from the banks.
Banks in Germany Shows Significant Interest in Cryptocurrency Industry
With the rise in the interest of banks of Germany in the cryptocurrency industry, the authorities of Germany cannot remain aloof and must look forward to accelerate the adoption of relevant legislation, according to a statement made by Frank Scheffler, the German parliamentarian.
A branch called Crypto Storage Deutschland GMBH was opened by the Swiss company Crypto Storage AG opened in Frankfurt the previous year. But tables turned this time as they received a denial of service from over 15 local banks.
Matthias Winter, Eversheds Sutherland Germany partner, shared the fact that a number of cryptocurrency companies that desired to legally enter the German market had been calling him. But, these startups are experiencing the denial of service from the banks. Winter also added that there exists no legal grounds for such refusals in Germany, and banks have not developed insights about the crypto business.
Besides that, numerous institutions and virtual currency firms have been facing uncertainties regarding the registeration of business with BaFin. Everyone have yet built a hope that, with the passage of time, the regulator will provide clarifications about everything. Hence, everyone are striving to move forward.
Up until now, the most understandable activity is the storage of digital currencies, according to Daniel Resas of Schnittker Möllmann Partners, which advises blockchain projects.
Resas also added its statement that cryptocurrency exchanges could be considered custodians of digital coins. However it also stated the determination of whether business models involving staking or placing cryptocurrency assets in smart contracts could be considered custodian storage under German law is particularly difficult.