Bitcoin (BTCUSD)

[Investors3]

Germany recognizes Bitcoin as a legal financial instrument
German financial watchdog provides clarity on the legal status of cryptocurrencies.
By Liam Frost
2 min read
Mar 3, 2020

https://decrypt.co/21148/germany-recognizes-bitcoin-as-a-legal-financial-instrument


In brief

* Germany has provided legal clarity on the status of Bitcoin and other
cryptocurrencies.

* It has published five characteristics of a cryptocurrencies.

* Cryptocurrencies are not to be confused with electronic money.

The Federal Financial Supervisory Authority (BaFin) of Germany has officially defined cryptocurrencies as financial instruments, providing further regulatory clarity. This makes it easier for those spending cryptocurrencies and will give some relief to businesses built around them.

According to the translation of BaFin’s press release published on March 2, cryptocurrencies are now classified as the “digital representations of value” that have the following characteristics:

*Not issued or guaranteed by any central bank or public body;
*Don’t have the legal status of currency or money;
*Can be used by individuals or legal entities as a means of exchange
or payment;
*Serve investment purposes;
*Can be transmitted, stored and traded electronically.

The document also notes that cryptocurrencies are not to be confused with various types of “electronic money” which have other sections of the law dedicated to them.

The new classification was based on definitions written by other regulators worldwide, such as the Financial Action Task Force. BaFin also clarified that prior to this, cryptocurrencies did not fall into any of the generally recognized pre-existing categories in Germany...