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Germany Asks Industries for Blockchain Development Recommendations

Germany Asks Industries for Blockchain Development Recommendations

Germany has recently consulted leading industrial groups and companies to become stakeholders in the country’s blockchain development projects.

Reuters reported that some industry groups and companies have been requested to submit recommendations regarding blockchain technology in the upcoming weeks. The names of these companies have not been revealed yet. Reuters maintained that although the government is seeking concrete results, it is still uncertain whether these recommendations will be translated into regulations or not.

Nearly 170 startups are currently dealing with cryptocurrencies or distributed ledger technology in Berlin. Startup leaders have repeatedly mentioned that due to the lack of a legal framework, they are facing “high entrance hurdles”.

In January, national media reported that Deutsche Börse, a major global securities marketplace in Germany, had made significant progress on its lending platform based on blockchain technology. Deutsche Börse is working in collaboration with HQLAx (blockchain liquidity management platform based in Luxembourg) for the said project.

In December 2018, Deutsche Bahn AG, Europe’s largest railway operator, decided to examine the possibility of integrating blockchain technology into its system. For the said project, Deutsche Bahn AG will collaborate with Unibright. In the same month, reports emerged of the development of a joint cryptocurrency exchange by Stuttgart Exchange Group and SolarisBank, Germany’s second-largest bank.

 

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German Financial Regulator Aims to Regulate Crypto but Faces Challenges

German financial watchdog BaFin is showing intention of increasing regulation of cryptocurrencies and ICOs in the country as Bitcoin trading volumes increase with time. But the organization is currently struggling to implementing the right regulations because of recent court decisions and lack of consensus on the matter among regional regulators.

While the government has so far refrained from over-regulating the space, resulting in unprecedented growth, several challenges remain for the authorities. Recently, a mining project in Germany Envion failed to deliver after raising EUR 100 million from investors in an ICO. Now because of the lack of regulation, investors are left with almost nothing and there is no responsibility on the coin project to deliver after raising money.

According to Felix Hufeld, the head of the BaFin, new regulations are essential for the industry. But he also said, “We don’t want to stifle innovation, but at the same time we have to defend ourselves against risks.”

While BaFin did spring into action and try to impose new regulation, a Berlin court jumped in and ruled that cryptocurrencies may not be seen as accounting units and canceled the initial outlines of the regulator. Hufeld was visibly helpless after this move and said: “Investors now have only minimal rights. I can only advise private investors to steer well clear.”

German cryptocurrency companies and community are also demanding clear guidelines for the sector. As a result, newly installed Bitcoin ATMs are not operational and several companies are facing difficulties.

The European Union itself is in a fix regarding regulations for the industry. Pro-crypto nations are lobbying for loose regulations while others want stricter safeguards to protect the investors.

Other nations like Japan, South Korea and the US are in a similar fix regarding the situation. Some have enacted regulations but still await further feedback and corrections.

 

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