Germany’s Coalition to Develop a Legal Framework for Cryptocurrencies and Tokens at an EU and International Level

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Germany’s version of Republicans and Democrats has reached agreement after four months of negotiations to simultaneously rule Europe’s biggest and richest country.

The 177 pages document, which lays out their governing plans, mentions blockchain technology five times, while cryptocurrencies and tokens are mentioned twice each. In a rough translation, the provisional coalition says:

“Coherent regulation and supervision should also contribute to Germany’s role as one of the leading digitalization and FinTech sites.

We will eliminate unnecessary bureaucratic obstacles and ensure that transactions with the same risks can also be regulated at the same time.”

What that means in practice is unclear, with Germany’s democrats given the most important office after Chancellorship, the Ministry of Finance.

Who exactly will be that minister is seemingly not yet decided, but a name seems to keep showing up, Olaf Scholz, Hamburg’s mayor. There’s apparently only one instance where he has mentioned blockchain tech. During a speech in September, he says:

“Since politics would never be able to keep up with the speed of technological innovations, any framework would have to be founded on solid principles.

On the one hand, a framework should not thwart innovative strength. On the other hand, a new business model shouldn’t be able to operate in an unregulated manner just because there wasn’t any framework in place yet.

Current developments such as virtual reality, blockchain or voice-controlled digital assistants only raised more questions and highlighted the importance of finding parameters based on principles.”

That statement is just as vague as the coalition document itself, which under a subheading “To the potential of Blockchain technology and to prevent abuse,” says:

“In our opinion, we want to develop a comprehensive blockchain strategy and work for one adequate legal framework for cryptocurrency and token trading at European and international level.

The possibilities of cash payments are to be expanded in the digital age. Anonymous payment with cash must remain possible.”

Tea leafs are easier to read, but the general context is proposed G20 regulations by the French Minister of Economy who said of Bitcoin “I don’t like it.”

Some of whatever opposition Germany now has left are suggesting Germany will do whatever France says, with Alexander Gauland, a former member of Ms. Merkel’s conservatives who became a lawmaker for Alternative for Germany, known as the AfD, stating: “One wonders, why Mr. Macron doesn’t just move into the Chancellery.”

That legal framework, therefore, might not be very appealing for many working in this space because France is known to be very behind on blockchain tech, with some seeing their stance more of an attempt to slow down other competing countries.

But the signals from the coalition document are contradictory. They say they want to attract Fintech companies in light of brexit, and they say:

“In the Federal Government we will use innovative technologies such as Distributed Ledger (Blockchain), so that based on these experiences a legal framework can be created.”

Germany’s opinion polls.

CDU/CSU in black is Germany’s version of republicans/conservatives led by Merkel. SPD is their democrats/labour while FDP in yellow is the classic liberals/libertarians. In blue, AfD, is what mainstream media says is their far-right party, but considering they said much of the same about Trump, we take it with a grain of salt until we do our own research of their policies.

As can be seen, 60% of the votes have gone to the two main parties, which in an ordinary democracy usually take turn to rule unless it’s a time of national emergency. The other four parties have 40% in combination, but each stands at around 10%, making their opposition disparate, weak, and almost non-existent.

Germany, thus, has in effect descended into a one party state. They are to push forward with a monetary union of EU, so that like some cities pay more in taxes and receive less in services, some EU countries might do the same, with Germany paying more and Greece potentially receiving money in what could be similar to wealth transfers given to East Germany.

Which makes this document of an historic kind. The future of Europe is to be decided by around half a million SPD members who have to vote on the coalition deal.

The young are against it, which might lead to fresh elections and potentially Merkel leaving the stage, but considering they are getting the finance and foreign affairs ministry, the majority might approve it.

However, Merkel is now the oldest serving leader in living memory, with some suggesting her political machinations have gotten rid of any contender. But the nation of Beethoven certainly has many capable leaders.

It might be time a fresh one, more attuned to our age, takes the stage, and speaks of blockchain tech or cryptos not as something to be wrapped in mountains of regulations, but as something to be championed in 21st century innovation.

 

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