BaFin Officially Classifies Crypto as a Financial Instrument
The Federal Financial Supervisory Authority (BaFin) recently published guidelines under which crypto is a financial instrument.
Regarding a press release on March 2, BaFin described crypto as a digital representation of value that is not issued or guaranteed by any central bank or authority. He added that the currency established by law does not tie cryptocurrencies. Hence, they do not have the legal status of currency or money.
However, BaFin treats crypto as a medium of exchange accepted by individuals or legal entities and can be transmitted, stored, and traded electronically.
BaFin Calls For Cryptocurrency Licencing
BaFin’s new cryptographic regulations ensure that regulators license cryptocurrencies before offering their services in the country. Such companies already operating in the country without a permit must apply by November 2020.
Besides, crypto trustees already registered in other EU countries cannot transfer their operating licenses to Germany. Such platforms should apply for new licenses to offer cryptocurrency services in the country.
According to BaFin, the new classification fits the guidelines for intergovernmental organizations such as the Financial Action Task Force (FATF). The classification is also part of countries’ move to adopt the fifth EU Anti-Money Laundering Directive (AMLD5), which begins January 1, 2020. Part of adopting AMLD5 includes changes to the German Banking Act and Payment Supervision Services Act.