Germany’s New Government Insists On the Need For Conjoined European Oversight of the Crypto Sector

The three political parties in Germany, leading the government, entered into a coalition agreement in which they mentioned cryptocurrency as part of building a level playing field between traditional finance and innovative business models.

According to the document, from December 2021, the Social Democratic Party (SDP), the Green Party and the Free Democratic Party (FDP) will take over the reins.

The Coalition is calling for European financial market surveillance law to be digitized and complex group structures to ensure coherent and risk-based oversight of new business models.

“A joint European oversight of the crypto sector is needed. We oblige crypto asset service providers to constantly identify beneficial owners,” the agreement says.

In addition, the German government insists that the EU regulator must prevent the misuse of cryptocurrencies for money laundering and terrorist financing.

The formation of the coalition reportedly took two months of negotiations following the federal elections in Germany on September 26. Angela Merkel is stepping down as German Chancellor, and her powers will be transferred to Olaf Scholz from the SDP.

Recently, the Board of Governors of the European Central Bank included an assessment of the effectiveness and security of cryptocurrency wallets and services in a new regulatory framework for the supervision of electronic payments.

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