Cryptocurrency Does Not Threaten Financial Stability, Says German Government
The German Federal Government says cryptocurrency does not pose a threat to financial stability, but still needs to be regulated.
Representatives of the German Federal Government have stated that cryptocurrencies do not pose a threat to financial stability, Cointelegraph auf Deutsch reports today, June 12. Nevertheless, the government sees the need for regulatory measures to control digital currencies.
According to the Federal Government, volume of crypto asset transactions is too low compared to the size of the global financial system to pose a serious threat to the current financial system. However, the German government considers it appropriate to closely monitor developments in this area at the G20 level. According to the Federal Government, this assessment is shared within fellow G20 countries.
The German government also referred to its answer today to a parliamentary inquiry from right-wing political party Alternative for Germany on problems associated with cryptocurrencies. The alleged problems include money laundering, illegal revenue, use of such currencies in online gambling and terrorist financing. Currently, a national risk analysis to be completed next year is in the works, which would identify any need for action on the government’s part:
"In order to address the risks of Bitcoin and other “cryptocurrencies", there are already important regulations in Germany: for example, German-based crypto traders must follow the same anti-money laundering regulations as other financial service providers – especially when it comes to identifying customers."
The Federal Government also noted that permission from the Federal Financial Supervisory Authority (BaFin) is necessary for the commercial trade of cryptocurrency. The government also emphasized the importance of international controls in the crypto sphere, stating:
"Rather, 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 this both levels."
An April report from the International Monetary Fund (IMF) stated that the body does not see cryptocurrency as a threat to global financial stability, citing similar reasoning to that of the German government.