Cryptocurrency Market Transactions Not Enough to Pose Threat to Traditional Financial Industry, Says German Government

A number of entities in different industries consider the rise of cryptocurrency a threat to their sectors. Even governments have been wary of the new technology as it has opened doors to unexplored areas where illicit actors are operating.

However, the German federal government categorizes digital cash as something that does not pose a threat to its financial balance, according to Cointelegraph. The reason behind the statement is the fact that the number of transactions that the crypto market conducts doesn’t come close to the dealings in the global financial industry.

But the country's federal government did stress the importance of putting regulations in place to control digital currencies, with the restrictions monitored and implemented at the level of G20. It added that this sentiment is agreed upon by other G20 countries, which include the U.S., U.K., Japan, and others in the E.U. All these nations have varying involvements in blockchain tech and the cultivation of the crypto market.

Moreover, the German government also addressed the risk associated with the rise of the crypto market like money laundering, terrorist funding, and deceptive startups trying to raise funds for bogus initial coin offerings (ICO).

"In order to address the risks associated with Bitcoin and other cryptocurrencies, there are already important regulations in Germany: for example, German-based crypto traders must follow the same anti-money laundering regulations as other financial service providers – especially when it comes to identifying customers,” the government said.

A risk analysis slated to be concluded next year is currently in development. It will act as a guideline for when the government should step in. Germany’s sentiment isn’t exactly mirrored by other entities that are affected by the crypto boom.

Two weeks ago, the International Monetary Fund said that it is putting up countermeasures to keep cryptocurrency at bay. One of the suggested approaches was for central banks to create their own digital coins to make their fiat money more appealing to the general public. However, the Bank of England expressed concern about this approach as it can create a struggle for traditional banking and its practices.