Germany is one of the world’s economic powers, but it has not been noticed when it comes to the crypto industry. However, the situation could change next year, with the implementation of the blockchain and crypto legislation.
Germany, behind the adoption of crypto
Although it has a robust economy, Germany has lagged behind countries such as Switzerland, Malta, and Japan, when it comes to cryptocurrencies and blockchain technology.
The popularity of Bitcoin and altcoins among the population is relatively low – only 1% of citizens estimate that they have used cryptocurrencies.
“In Germany, at present, there are approximately 800,000 owners of crypto currencies,”
explains Philipp Sandner, head of the Frankfurt School Blockchain Center.
“This represents about 1% of the total population, but in the traditional key-target group (between 20 and 45 years old, adept at using technology) it is about 8-10%.”
In addition, the start-up ecosystem in Germany is much more enthusiastic when it comes to cryptocurrencies.
“There is a thriving start-up ecosystem in Berlin, Munich and Frankfurt. And in Stuttgart, there is Börse Stuttgart who has now launched a crypto segment on their platform – it is the first regulated exchange in Europe ”
Sandner explained.
Larger companies and institutions remain somewhat skeptical of crypto:
“Apart from such landmark projects from a few companies, the topic of crypto assets is not widely understood, and traditional financial organizations are very reluctant to approach this new field.”
Change in policy, change in adoption
However, the chances are that the situation will change next year. In January 2020, the new regulations of BaFin, the German financial authority, will enter into force. They have the potential to reduce institutions’ aversion to blockchain and cryptocurrency technology.
“By the new regulation that will come out from January 2020, it will legitimize the holding and trading of crypto assets by financial institutions. These activities will be based on a BaFin (Federal Financial Supervisory Authority) license from Germany ”,
says Sandner.
“This will significantly lead to the adoption of crypto assets among financial institutions and also in the retail sector.”
Bitcoin’s popularity growing
Another impetus for adoption will be the German Government’s Blockchain Strategy, which was released in September.
“In September, the Merkel administration launched a national blockchain strategy to pave the way for the token-based economy,”
explained Benjamin Jones, CEO of the Bitwala exchange in Germany.
“The strategy is quite comprehensive and addresses a wide range of industries, research and development efforts. It even includes pilot projects for using blockchain technology in citizen identification systems ”.
Jones also points out that:
“The Blockchain strategy also states that there is an ongoing institutional dialogue with the monetary decision-makers for digitizing the central banks’ cash flows. This could be a starting point. ”
Therefore, the adoption of cryptocurrencies and blockchain technology is likely to grow in Germany in the coming years. Sandner is of the opinion that the country will become a promoter of technology in the European Union.
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