The new German government is searching for clear regulations for cryptocurrencies. In a recent coalition agreement, they mention that they want to find similar regulations between traditional finance and other types of innovative businesses. This comes after a coalition deal in Germany in which Social Democrats (SDP) partnered with the Green Party and the Free Democrats.
New German Government Proposed Clear Crypto Regulations
In the agreement published by these three political parties, they want to offer risk-adequate supervision to new businesses and technologies such as blockchain technology and cryptocurrencies. Basically, they want to find better ways to address the way in which financial innovations are regulated.
The coalition government talked about European regulators working under clear regulations. As they explained there is a need for European supervision related to cryptocurrencies and companies operating in the market. The intention is to identify beneficial owners and prevent money laundering activities through digital currencies.
It is worth taking into consideration that crypto regulations are still being developed around the world. There is no clear market example on how to regulate digital assets. There are countries such as El Salvador that have already made Bitcoin legal tender. Some other countries such as China have implemented very strict regulations to control the cryptocurrency market in the country.
Europe has yet not a clear regulatory framework for cryptocurrency companies and blockchain firms to operate. There are, however, some jurisdictions that have been friendlier than others. Although it’s outside the European Union, Switzerland has been a clear cryptocurrency hub for investors and companies.
Now, Germany is working to present clearer regulations about cryptocurrencies. Although this could be positive for companies operating in the market, it might not be the best for users that want to protect their privacy and identity. Individuals would have to share all the information required in order for firms to be compliant with anti-money laundering regulations.
Furthermore, France has also requested Binance to improve their AML compliance before deciding to open a new office in the country. The French financial regulator Authorité des Marchés Financiers (AMF) informed that if Binance wants to create a local hub in Paris, it will have to improve its AML processes.
Binance is one of the largest cryptocurrency exchanges in the world and it has been operating for several years now. Thus, it shows that two of the largest economies in the European Union are asking for better and clearer regulations in the cryptocurrency space. However, it is not clear how this could affect the future development of the crypto market.