Draft bill on the FinmadiG

The Financial Market Digitization Act (FinmadiG) marks a turning point in the regulation of digital financial markets in Germany. It is a response to the growing importance of digital financial services and the need to create a trustworthy and efficient environment for these services. This law is part of a broader strategy aimed at establishing Germany as a leading location for digital financial innovation.

The importance of FinmadiG

The FinmadiG serves the national implementation of various European regulations that were adopted as part of the EU strategy for a digital financial system. It includes regulations on the national implementation of the European Regulation on Markets in Crypto Assets (MiCAR), the Regulation on the Transmission of Information relating to Transfers of Funds and Transfers of Certain Crypto Assets, the Regulation on Digital Operational Resilience in the Financial Sector (DORA) and the Directive on Digital Operational Resilience in the Financial Sector (DORA Directive).

Standardization of the definition of crypto assets

A central aspect of the FinmadiG is the standardization of the definition of crypto assets. The law aims to harmonize the German term “Kryptowerte” with the European term and introduces the term “cryptographic instruments”. This adjustment is crucial in order to create clarity and consistency in the regulation of digital assets.

Introduction of the Crypto Markets Supervision Act (KMAG)

The KMAG, a new law introduced as part of the FinmadiG, regulates the scope of application of MiCAR in Germany. It contains provisions on the supervision of markets for crypto assets and defines the powers of BaFin. This law is an important step towards integrating blockchain technology into German financial and capital market law.

Adjustments to existing laws

The FinmadiG proposes amendments to existing laws such as the KWG and the GwG. These adjustments are necessary in order to bring existing national crypto-regulation into line with the European framework.

Licensing procedure and obligations under money laundering law

The law provides for a simplified licensing procedure for providers of crypto-asset services and sets strict standards for transactions with self-hosted addresses. These regulations are crucial for effectively combating and prosecuting financial crime, money laundering and terrorist financing.

Link to the Future Financing Act

Interestingly, the FinmadiG complements the previously published Future Financing Act, which I have already reported on here. The Future Financing Act, which entails a large number of changes to stock corporation, capital market and tax law, also has a profound impact on the crypto market, particularly through the introduction of the crypto share. This development is revolutionary, as it builds an important bridge between the traditional financial markets and the innovative world of cryptocurrencies.

Conclusion

The FinmadiG is an important step in the development of a modern and efficient digital financial market in Germany. It creates the necessary legal framework to strengthen confidence in new digital financial infrastructures and at the same time increase digital resilience. In combination with the Future Financing Act, it provides a comprehensive basis for the further development of the German financial market in the digital age.

The FinmadiG paves the way for harmonized regulation of digital assets at European level and helps to establish Germany as a leading location for digital financial innovations. It offers opportunities for innovation and growth in various sectors, from crypto stocks to traditional financial services, and is a decisive step towards a more modern and flexible financial world in Germany. The entire draft bill can now be found here.

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.