Germany’s Federal Financial Supervisory Authority (BaFin) issued Monday a new guidance that officially classifies Bitcoin and other cryptocurrencies as legal financial instruments in the country.
The classification of digital assets as legal financial instruments came after The Fifth Anti-Money Laundering Directive (5AMLD) took effect on 10 January 2020.
With this, BaFin shared its official description of digital assets in a press release as:
“Digital representations of a value that has not been issued or guaranteed by any central bank or public body, and does not have the legal status of currency or money, but by natural or legal persons. But it’s accepted as a medium of exchange by natural and legal persons and can be transmitted, stored, and traded electronically.”
BaFin, in its publication, noted that while all digital assets are classified as financial instruments, they are further categorized as investment, securities, and security and investment.
The update in Germany’s anti-money laundering laws digital assets classification has also resulted in the mandatory acquisition of licenses for all cryptocurrency custodial firms.
Institutions that provide crypto custodial services without a license at present have until the end of November 2020 to apply. They must, however, inform BaFin before 30 March 2020 of their intention to obtain a license in order to be exempted from receiving penalties.
To avoid confusion, BaFin also provided what cryptocurrency custodial firms are:
“The legal facts of the crypto custody business are fulfilled by custodians who take crypto values into care as a service for third parties. This primarily includes service providers who store their customers’ crypto values in a collective inventory without the customers themselves being aware of the cryptographic keys used.”
According to reports, at least 40 German banks have already applied for a license, following the directive from BaFin.
With the new classification of Bitcoin and cryptocurrencies, Germany looks to be embracing digital assets more and more, as it has been one of the countries open to accepting cryptocurrencies.
Meanwhile, cryptocurrency holders can further explore the use of digital assets, and one of the better ways to achieve this is to play Bitcoin casino games or wager on sports in offshore crypto online casinos and sportsbooks.
If you’re interested in getting an updated 2020 list of all Bitcoin casino reviews for this market, check out the casino review section.