1st January 2020, saw the European Union money laundering directive go into force in Germany. The majority of the changes to the previous directives focus on the payment supervision act and the German banking act. The new law defines digital currencies in a new manner as digital representations of value that are not guaranteed or issued by either a Central bank or a public authority that doesn’t possess the legal status of either currency or money. However, it accepts that this is based on practice or agreement and accepted by legal or natural persons as a means of payment used for investment purposes.
In simple terms, they accept that digital currencies do not have a traditional legal status but can be used for investment and payments for goods and services. Crypto custody providers in Germany will need to obtain a license from the Germany Federal Financial Supervisory Authority (BaFin) to comply with the new regulations with a grace period running up to 1st February 2020. As a company with a global reach, Dragon is standing by to support Germany as it comes to terms with the practical realities of the new requirements and is on hand to offer support to any companies who need help and Blockchain consultancy.
Additionally, companies that are already offering their customers financial and banking services will not be able to offer crypto services because of the risks involved which means that companies seeking to provide their customers crypto custody services will need to do so through a subsidiary. Additionally, the tightening of the regulations means that "passporting" concept whereby one registered provider in an EU member state will not have to register to offer his services to another EU state will no longer work for crypto custody.
Curious to know more about crypto regulations and how most countries are treating these new technologies? We’ll bring you the latest news from around the world on the Dragon blog, all you need to do is head over there now to stay ahead with the latest Blockchain and crypto news.