The Federal Authority for Financial Supervision of Germany (BaFin), in accordance with the application of the Fifth Directive of the European Union against money laundering (which began operating on January 10, 2020), determined the inclusion of digital assets within the category of financial instruments, unlike previous documents that only indicated the consideration of security tokens within this category, he said Criptonoticias.
According to the nation's financial regulator (BaFin), digital assets are: “a digital representation of a security that has not been issued or guaranteed by a central bank or a public entity, and that does not have the legal status of currency or money, but of a legal or natural person. However, it is accepted as a medium of exchange by legal and legal persons and can be transmitted, stored and marketed electronically.".
Changes for cryptocurrency custodians? Cryptocurrency custody platforms that wish to operate legitimately in Germany will need a license issued by the country's regulator, those currently operating, may apply for such a license until the end of November 2020. However, the recent inclusion of cryptocurrencies to The classification of financial instruments has allowed banks to also operate as custodians of cryptocurrencies. The question is, why would the cryptocurrency market want to contract with banks to manage and protect their cryptocurrencies?
The answer is simple, so far, much of the problem with digital assets is insecurity in their custody, hackers have stolen more than USD 9.8 billion in digital assets since 2017 noted BNN Bloomberg. However, the importance of security has been enhanced by the adoption of cryptocurrencies such as bitcoin and ether among institutional investors. They will not want to own these virtual assets if they cannot have the same protection as their cash, stocks, bonds, among others. That is why, banks have found a new niche where they can expand their services. Around 40 banks have applied to receive such license from the country's regulator.
¿Opinions? On the one hand, the BdB banking association argues that it is a “movement in the right direction” in view of the fact that banks have experience in asset custody that could protect investors from hacker attacks, prevent money laundering situations. money and terrorist financing, he said CryptoPotato. On the other hand, the financial expert, Niels Nauhauser, is not so optimistic, and notes that “if they are allowed to sell cryptocurrencies and keep them for a fee, they run the risk of converting their assets at risk of a total loss to their customers".
What is not discussed is that allowing banks to enter this market is undoubtedly a step forward for the massive adoption of digital assets.