The new German government has cited cryptocurrencies in its coalition agreement, advocating a level playing field between traditional finance and “innovative business models.”
Three German political parties agreed to a coalition agreement this week in which the left-leaning Social Democrats (SDP), the Green Party and the right-leaning Free Democrats (FDP) will take the reins from December this year.
According to a rough translation of the 177-page agreement published on November 24, The coalition advocates a new “dynamic regarding the opportunities and risks of new financial innovations,” such as crypto assets and blockchain companies:
“We are adapting the European financial market supervision law to digitization and complex group structures to ensure holistic and risk-appropriate supervision of new business models.”
“We need joint European oversight for the cryptocurrency sector. We oblige crypto asset service providers to systematically identify beneficial owners,” add the agreement.
The document states that the EU supervisory authority must “not only deal with the traditional financial sector, but also prevent the misuse of crypto assets for money laundering and terrorist financing.”
The formation of the coalition reportedly took two months of negotiations following the German federal elections on September 26, and marks the end of Angela Merkel’s 16-year reign as chancellor, who is retiring and will be replaced by Olaf Scholz of the SDP.
Cryptocurrencies advance in the EU
In another part of the continent, The European Council – which guides the EU’s political agenda – adopted two proposals called “Regulation on the framework of crypto-asset markets (MiCA)” and “Digital operational resilience law” (DORA).
MICA in particular – initially drafted by the European Commission in September 2020 – aims to create a “regulatory framework for the crypto market that supports innovation and harnesses the potential of crypto assets.” Although it has yet to be ratified by the European Parliament, if enacted it will subject cryptoasset issuers to more stringent requirements, but non-fungible tokens (NFTs) and utility tokens will remain outside the scope of regulation.
In a comprehensive post by user “BelgianPolitics” on the r / CryptoCurrency subReddit on November 26, The progressive regulation proposal was labeled the “most important to date for the entire cryptocurrency industry.”
Redditor’s analysis has nearly 900 comments at the time of writing, and provides a detailed summary of the proposed laws in MICA.. The author highlighted the importance of the proposals:
“These rules will have to be followed by all entities operating in the European Union. However, due to the”Brussels effect“There is a good chance that these standards will eventually become international standards. While everyone is concentrating on the US and China, the EU coincidentally leads the way, “said BelgianPolitics.
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