Cryptocurrency Industry Affected by New Bans Imposed by Germany

Cryptocurrency Industry Affected by New Bans Imposed by Germany

Germany, Europe’s economic locomotive, has entered a difficult period according to numerous indicators. This can adversely affect the entire Union and even the entire world economy.

Unfortunately, the regulatory authorities in the country have opted for the introduction of bans that also affect the cryptocurrency industry, which does not help to create positive perspectives.

Pessimistic economic forecast in the Euro area

A German economic and financial crisis would be a seismic event of global proportions, affecting all markets. International trade wars and geopolitical uncertainty in the region are negatively affecting the German economy, which relies heavily on exports. They represent almost half of the country’s annual economic output.

Germany is the leading exporter of goods in Europe and ranks third among the largest exporters in the world, after China and the United States. Negative trends have forced the German central bank to revise the economic forecast in a negative way. Bundesbank believes that the German economy will grow only around 0.6% this year. The number represents a significant decrease from its previous prediction of 1.6%, which was announced in December.

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If Germany is afraid of one thing, it is inflation. Being a major exporter of high value added products, quality products, the inflation of the euro would reduce its income. Unfortunately, other euro area countries, such as Italy, actually need higher inflation so that their exports remain at least competitive compared to German exports.

This contradiction accentuates the prospects of a future economic crisis in the euro area.

A dysfunctional economy in Europe

“In Europe we have a dysfunctional monetary union”,

said German financial strategy consultant Marc Friedrich.

“The countries of the southern EU suffer from the euro and the situation in this area will never improve”,

the economist pointed out.

Friedrich believes that the recession has already begun and believes that a new digital monetary system will emerge, in which countries will need decentralized currencies.

Unfortunately, the German regulatory authorities are not open about the cryptocurrency industry. According to the legislation that will enter into force starting next year, crypto companies will have to apply for a special license from Bafin, the Federal Financial Supervisory Authority. Also, new AML rules will be introduced based on the EU’s fifth anti-money laundering directive.

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The new regulations already affect exchanges and companies operating in the crypto industry. For example, the Bitpay payment processor has opted to suspend its services in this country. It is quite possible that his example will be followed by other companies.

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