Germany’s new government has mentioned cryptocurrencies in its coalition agreement, and demands equal conditions of competition between traditional finance and “innovative business models”.
This week, three German political parties agreed on a coalition agreement that will bring left-wing Social Democrats, the Green Party and the right-wing Free Democrats to power from December this year.
According to a preliminary translation of the 177-page agreement released on November 24, the alliance calls for a “new dynamic regarding the opportunities and risks associated with new financial innovations” such as cryptocurrencies and business blockchain:
“We make European law on financial market supervision suitable for digitalisation and complex corporate structures to ensure comprehensive and appropriate monitoring of the risks associated with new business models.”
We need joint European supervision of the cryptocurrency sector. We require that providers of cryptoactive services constantly identify real owners, the agreement states.
The document states that the EU supervisory authority should “not only take care of the traditional financial sector, but also prevent the misuse of cryptocurrency values for money laundering and terrorist financing”.
The formation of the coalition allegedly took two months of negotiations after the federal election in Germany on September 26, which marked the end of Angela Merkel’s 16-year reign as retired chancellor, and will be replaced by Olaf Schultz from the SPD.
Advances in cryptography in the EU
Elsewhere on the continent, the European Council, which sets the EU’s political agenda, has adopted two proposals called the Regulation of Cryptoactive Markets (MiCA) and the Digital Flexibility Act (DORA).
In particular, MICA, originally formulated by the European Commission in September 2020, aims to create “a regulatory framework for the cryptocurrency market that supports innovation and builds on the potential of cryptocurrencies.” Although it will still have to be ratified by the European Parliament, if adopted, it will impose stricter requirements on issuers of cryptocurrencies, and non-perishable tokens (NFT) and utility tokens will go out of regulation.
Related topics: EU central banks settle DLT-based assets
In a detailed post from the user “BelgianPolitics” on r / CryptoCurrency subreddit of November 26, the progressive regulatory proposal was considered “the most important crypto industry to date.”
The Redditor analysis contains almost 900 comments at the time of writing and provides a detailed overview of the proposed laws in MICA. The author emphasized the importance of the proposals:
“These rules must be followed by all organizations operating in the EU. However, due to the ‘Brussels effect’, it is very likely that these rules will eventually become international standards. While everyone focuses on the US and China, the EU is doing better. “.