On 28th October, Handelsblatt - leading German Business news portal, reported that the Financial Supervisory Authority [BaFin] of Germany, opted for a coordinated global effort for the regulation of Initial Coin Offerings [ICOs].
The financial regulators believe that the state needs to develop a formal understanding of the new financial instrument [cryptocurrency]. A call for an international endeavour to explore the emerging asset class had been taken, although the federation remains skeptical of its use cases and claims to be unassertive about it becoming a “niche topic” to discuss.
Felix Hufeld's opinions on ICO regulations in Germany
Felix Hufeld, the lawyer and President of BaFin, manifests the inclination towards the coordination of global efforts for regulating ICOs.
Hufeld explains that “the number and volumes per ICO are growing enormously. " and how "investors usually have minimum rights”. He also states that the “time is ripe for a European, even better, a global regulation.”
Hufeld concludes that regulators are monitoring the cryptocurrency market and are discussing its ordinances. The fact that many countries in Europe are dependent on the laws amended by the EU regulators it makes the topic prolonged.
As money laundering remains one of the major concerns of governments and financial regulators, Hufeld stated that it was important to "safeguard privacy rights of investors" and said that there needs to be “certain minimum standards” implemented for the governance. He also believes that many things are completely unclear [cryptocurrency markets] and that the young emerging market segments attract “lucky knights, knowing and ignorant”.
Germany's past take on digitalized currency
Evidently, this is not the first time Germany made statements related to the cryptocurrency regulations. In February '18, France and Germany spoke in unison about the requirements of a global effort for the restrictions implied to cryptocurrencies.
As per reports, BaFin has made a decision regarding the regulations on digital tokens. The financial regulators believe in monitoring it closely and have decided to warn consumers before their involvement, this may vary from providing a detailed guideline in the area of securities law to “prudential definitions" of the digitalized market.
Opinion:- In March ‘18 the German finance ministry claimed Bitcoin [BTC] to be a legal tender, enabling it to be utilized as the lawful currency for expenditure, tax and exchange purposes. Even though, ICOs are similar to an acquainted financial investment term - IPOs, the ministry is skeptical of its establishment. The effective regulation of digitalized currencies can be achieved through international coordination since the Germans believe in global regulatory powers more than the powers of a nation or a state. It clearly relies on the understanding of EU’s regulations on empowering or disapproving the idea of cryptocurrencies and ICOs.