After a very bumpy few days for crypto that have seen Bitcoin prices plunge to a two-month low, there is a little bit of brighter news for crypto followers today.
On June 12th, the German government responded to a parliamentary inquiry posed by right-wing political party Alternative for Germany, on issues surrounding cryptocurrencies. The response states that Bitcoins and other crypto-tokens do not pose any threat to financial stability – in the Federal Government’s view.
The German government’s response goes on to explain that cryptocurrencies take up too small an amount of market cap to make any sort of special regulatory action necessary. However, there are security concerns surrounding money laundering, the funding of terrorist organizations, online gambling, and other forms of illegal revenue that are being prepared to be studied in a national risk analysis assessment project. The project is expected to be completed sometime next year. The German government hopes this assessment will provide further information on the scope of illegal activity involving cryptocurrency, and will use it to determine if there is any need for further government intervention.
Currently, there are already a number of regulations surrounding cryptocurrency, which are already established in German law. German cryptocurrency traders are held to the same anti-money laundering regulations as any other financial service providers, and any commercial trading of cryptocurrency requires the permission of the Federal Financial Supervisory Authority (BaFin), stated the response.
Call for Coordinated Further Regulations on Crypto
According to a statement, the German government is of the view that further regulation of cryptocurrencies may most importantly require a coordinated effort at the international level. This notion echos the position of many other European nations, as crypto by its very nature isn’t bound by any national borders. The statement reads:
There is a need for coordinated action at European and international level. The Federal Government is therefore pressing for a harmonized handling of crypto-tokens at European and international level.
According to Cointelegraph, the report is in tandem with a report by the International Monetary Fund in April, where many of the same points were made. The report states that the primary point to be made regarding cryptocurrencies is that they make up too small a share of market capital for there to be concerns of any serious financial implications arising.
The explosion of cryptos in the recent past, has led to an enhanced interest from the public and the regulators. Some countries have taken rather conservative measures to tame the growth and expansion of the cryptocurrency market, with some even banning the trading of cryptos in their countries.
Some countries within the European Union like Poland have taken cautious approaches in recent months too, but German’s conclusions seem a lot more measured.
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