New law which is requires digital asset custodians to be licensed. Crypto custodies and target German clients must express their intension to German’s Financial Supervisory Authority (BaFin), which supervises about 2,700 banks, 800 financial services institutions and over 700 insurance undertakings, to have their license.
With the new clause, penalizing to those crypto custodians who serve German customers has been removed but those companies are waiting on BaFin to release final regulations around the world. Though there is talking about new legislation yet BaFin is not going to think about how to deal with the legislation. Even there is no specific date yet mentioned for the BaFin press officer, Norbert Pieper, to communicate the results of their assessment.
It is thought that departure of crypto firms won’t be happened because of the new license requirement since the final regulators have not yet set. Unlike to that departure of crypto firms was seen in New York after the BitLicense requirement. London-based Bitstamp, which allows trading between USD currency and bitcoin cryptocurrency, wants to continue operating in Germany but it is unknown whether they will apply for license and along with this, crypto firms could use a white-labeled custody service with a view to operating in Germany.
After getting license companies will be German financial institutions and not classified as banks. Crypto is going to be a legitimate industry according to the law. It is thought that crypto sector is taking a look of professionalism. Reportedly other countries won’t go for a full-fledged license. On the off chance established players are taken from the banking side then they should be given a safe environment. DLC group with their own white-labeled crypto custody service is offering consulting services for firms interest in applying. The law is only for German and exchanges that will operate without license will be subject to punishment.
The cost of licensing will be akin to other German financial services licenses. Along with other exchanges Switzerland-based Crypto Storage AG is also opening a branch in Germany. It is also expected that large banking houses will do custody business in the future. Berlin-based solarisBank opened a subsidiary namely solaris Digital Assets to offer crypto custody as a service this month. But it is known that whether the law will be passported to other European Union states.