DeutschFor a long time, Germany was considered by many crypto experts to be a kind of wasteland when it came to digital currencies such as Bitcoin or altcoins such as Ethereum. Banks, insurance companies and other industries in the country – according to critics – were too slow to discover the possibilities of cryptocurrencies and blockchain technology. Accusations of this kind were also made after the German federal government announced its plans for a so-called blockchain strategy. According to crypto insiders and some representatives from the political opposition, the government is working too unambitiously and too slowly on implementing its own plans. The aforementioned blockchain strategy is a good example of the federal government’s cautious approach when it comes to using new technologies.
Blockchain Strategy under Criticism: Politics is Working Too Slowly
The government has been working on the concept for around two years, for a long time without a clear line. At least that’s how many observers see it, who would have trusted Germany to play a leading role. If not worldwide, then at least within Europe, where, in addition to Switzerland with the canton of Zug as “Crypto Valley”. Austria and small states such as Liechtenstein are increasingly serving as magnets for blockchain startups. At times, the federal capital Berlin developed into a hot spot for crypto companies. However, the laborious creation of clear rules in politics is slowing down development rather than companies feeling attracted by a positive German crypto sentiment.
Germany and Bitcoin – Prefer to Criticize than Rely on Innovations?
In the recent past, the German central bank and the Federal Minister of Finance Olaf Scholz made themselves heard with considerations regarding a ban on the Facebook currency Libra. In addition, politicians were thinking about creating a “digital euro”, which could serve the increasing need for a fast, transparent and inexpensive means of payment across borders. The mills grind slowly in Germany, while other countries such as China, Russia or Venezuela are already one step further. At least China is considering – in parallel with further stock exchange closures in the country – an early introduction of the digital yuan. On the other hand, despite all the government’s concerns regarding digital currencies such as Ethereum or even its own ICOs from private companies, there is at least insight into the topic of blockchain. Some banks, and especially other industries such as the automotive sector, are gradually exploring the possibilities of technology in Germany.
Many Crypto Investors Feel Left Alone
However, the increasing interest of many consumers in Bitcoin and Co. is falling by the wayside. The reason for the German government’s cautious work is, for example, security concerns. On the one hand, with regard to applicable data protection regulations. On the other hand, all the more because of the decentralized functioning of digital currencies. Germany plays a major European role in the fight against terrorist financing and money laundering. It is difficult to imagine the compatibility of the guidelines and the networks of digital currencies.
Modern Regulation could Bring Germany Forward
According to many financial experts, the lack of regulation for the growth market is leading to Germany falling behind technologically. The government and the Bundestag would have to pave the way for legal framework conditions faster than before. And so quickly that the numerous interested parties for the crypto and blockchain location Germany do not prefer to choose a country that is more open to developments. “Act instead of weighing and evaluating”, is how various analysts summarize the federal government’s current behavior in a nutshell. Creating clear, innovation-friendly (security) standards could bring Germany to the top of the crypto nations. It is not too late to become active. But the window of opportunity is limited.
Clear Rules could Strengthen the Digital Transformation
Other countries have shown how quickly solutions can be found if the willingness is there. With appropriate legal certainty, Germany would not only recognize and take into account the needs of an ever-growing group of citizens. Also, within a few years, a landscape of forward-looking companies between digital currencies, artificial intelligence and blockchain ideas could emerge. In any case, an approach that focuses exclusively on Bitcoin and only concentrates on negative aspects such as possible uses for criminals or climate-damaging aspects is wrong. In both points, the government could turn its still quite skeptical and disinterested position into a pioneering role with an exemplary function for other countries. The digital transformation would thus be better taken into account than before.
To what extent actual political measures would influence the prices of coins such as Ethereum or Litecoin remains to be seen. The fact that the blockchain strategy “already” in 2020 could lead to digital bonds from the state fuels the hope for more optimism in the crypto location Germany. And in the end, the relationship between Germany and Bitcoin could still become a really good one.
Part 1: Argentina and Bitcoin
Part 2: China and Bitcoin
Part 3: Russia and Bitcoin
Part 5: USA and Bitcoin
