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An interesting year for the German crypto industry has come to an end. Although blockchain technology and cryptocurrencies are not yet widely accepted in the country, more and more domestic institutions and investors are showing interest in the crypto world due to the clarity of the law.
Here, we will review the most important developments in the German blockchain and cryptocurrency industry in 2021.
Securities Law Reform to Embrace Blockchain
German lawmakers are increasingly taking the lead when it comes to legal challenges, and 2021 will be no exception.
From June 2021, the Electronic Securities Act (Electronic Securities Act) Established digital securities And abolished securities documents that were previously legally mandatory.
In December 2021, the first batch of electronic securities has been release Under the new law, in the form of DekaBank’s bearer bonds.The fast-growing restaurant chain Beets & Roots from Stuttgart has also recently release Participation rights on the blockchain through the investor platform.
Another step in advancing blockchain is the introduction of crypto-securities. These are issued and managed on a distributed ledger technology-based securities register, which now includes fund shares.now existing As a draft, the new regulations (Crypto Fund Share Supervision) Will come into force in 2022.
Fund positioning method (Fund Standards Act) should also be mentioned as Milestones for accepting digital assetsThe bill, passed in July 2021, allows special funds such as pensions and insurance companies designed specifically for the institutional market to invest 20% of their fund volume in crypto assets. For example, among the large fund providers in Germany, joint investment A lot of money has been invested in Bitcoin (bitcoin).
Blockchain in the Financial Industry
according to According to a recent Bitkom survey, 59% of German companies generally see blockchain as an important future technology, but it is still significantly undervalued. Companies with more than 2,000 employees and/or the financial sector are researching the use of blockchain.
More and more German financial institutions are developing products and platforms for digital assets. The Stuttgart Stock Exchange’s crypto trading app Bison has achieved notable success.Since the beginning of 2021, Bison’s active users have doubled to around 550,000, while transaction volumes have grown hit About 6.3 billion US dollars, or 5.6 billion euros.
The exchange has been able to expand in the country.Austrian Cryptocurrency exchange operator Bitpanda Open its new location in berlin 2021. Coinbase – this becomes a Officially Regulated Crypto Custodian in Germany August – is developing its German business at full speed.
Banks are not far behind. Private Bank Hauck & Aufhäuser Expand the scope of services In the field of digital assets, while savings banks Looking to offer clients trading and investing Major digital currencies such as Bitcoin and Ethereum (Ethereum) directly from their current account.
Regulation is getting stricter
Although Blockchain adoption In Germany, regulators are tackling the risk of unregulated markets in different ways.
July 2021, Federal Ministry of Finance post A draft regulation that could have a significant impact on the industry. The document deals with the current tax exemption for crypto investments after a one-year holding period.Specifically, it said, “The withdrawal period has been extended […] The ten-year extension may be extended if the unit of virtual currency or token is used as a source of income and income is generated from it for at least one calendar year. “
Investing in tokens is often interesting from a tax point of view for investors with German residency, as capital gains are no longer taxed after a one-year holding period. This will now change. If the tokens are not only held but also used for further returns, the holding period will increase to 10 years. Therefore, it is difficult for individual investors to use the tokens outside of buying and holding because the reporting process is time-consuming.
With this new regulation, Germany loses a lot of competitiveness, but it also has advantages. While investors are waiting for the tax exemption on the actual investment, they can earn additional returns. But now, the federal Treasury is stepping in and proposing a change: Anyone who wants to use their crypto assets for additional returns by staking, for example, will automatically extend the holding period from one to ten years.
The federal government also wants to regulate the anonymity of cryptocurrencies.In the future, trading platforms such as cryptocurrency exchanges will be obliged Collect information from senders and recipients Such as name, address and account data.
In addition, the Anti-Money Laundering Act will also Apply Cryptocurrency of the future. Cryptocurrency transactions worth $1,120 or €1,000 must then be disclosed at the time of writing.
Football opens doors for NFTs
non-fungible tokens (NFT) boom in 2021, with museums, auction houses, individual artists and bands raking in record revenue in 2021 from the sale of digital art and certificates.
fan zonea German startup founded in October 2020, has been able to Win a Porsche to become an investor, and also set foot in the NFT market in 2021. As an official partner of the DFB, offers trading cards for the German men’s, women’s and under-21 national teams.
There is also a thriving NFT transaction in the art world. Musician Fynn Kliemann post A series of musical songs, while German Deutsche Telekom and German foreign broadcaster Deutsche Welle First development of NFT artwork.
Blockchain and NFTs have further found new commercial applications in the media industry. In April 2021, German stock exchange operator Deutsche Börse and Commerzbank Announce Partner with fintech 360X AG to develop digital marketplaces and ecosystems for art and real estate. Similarly, Jota release NFT market Based on tangle technology on DevNet, July 2021.
On the road to a digital euro
2021 will undoubtedly be the first year of the German central bank digital currency (CBDC).ECB launches two-year pilot phase investigation The possible introduction of a digital euro, with Germany playing a leading role.
The country’s central bank, Deutsche Bundesbank, led a working group of German financial institutions, companies and fintech firms to discuss Use of Central Bank Digital Currencies.
In March 2021, Deutsche Bundesbank, Deutsche Börse and the Bundesbank, together with several major international banks, tested a new program Used to process digital bond purchases. The trial run shows that it is possible to bridge the gap between traditional payment systems and blockchain-based transactions.
Blockchain Industry Hopes for 2022
With more clarity and trust in the law, we can expect blockchain innovations and use cases to continue to emerge and develop in Germany in 2022.If market participants, including so-called middle class, Or SMEs and family businesses – which make up more than 99% of all companies in Germany – are willing to embrace the technology, and blockchain has a good opportunity in Germany.
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