Germany is moving to a new administration, led by a coalition of three political parties, after 16 years under the leadership of Chancellor Angela Merkel. The new government has a lot of promises and expectations, which might mean four years of massive growth and adoption for the digital currency industry.

The ‘traffic light coalition’ led by Olaf Scholz will govern Germany for the next four years. Germany is Europe’s largest economy and the world’s fourth-largest. This government, which comprises three political parties, has promised to revive Germany’s economy, which is trailing behind the rest of Europe while it recovers from the pandemic.

The new government’s agenda prioritizes digitalization. A 177-page study outlined many options for achieving this aim, including the use of digital currency and blockchain technology.

According to the document,

“We need a new dynamic in relation to the opportunities and risks from new financial innovations, crypto assets and business models. We advocate a level playing field with equal competitive conditions within the [European Union], between traditional and innovative business models and towards large digital companies.”

The new administration will concentrate on improving regulations for the digital asset market. It plans to regulate the industry in collaboration with other countries and regional regulators to guarantee comprehensive and risk-adequate oversight of emerging business models.

For the crypto sector, they need European-wide oversight. They make it mandatory for crypto asset service providers to identify the beneficial owners consistently.

On the other hand, the new government is wary of digital currencies, realizing that they could be exploited for criminal reasons. To combat this, it will collaborate with regional regulators to ensure that not just the traditional financial industry is protected but that crypto values are not used for money laundering or terrorist financing.

The traffic light alliance wants to make Germany the place to be now that tokenization has become a growth engine, particularly for business customers. According to one member of Parliament from a coalition party, the government will approve the issuing of tokenized assets.

According to the coalition’s agenda,

“Digital financial services should work seamlessly, therefore, we will create the legal framework and the possibility to expand the issuance of electronic securities to include stocks.”


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