German Federal Financial Supervisory Authority Releases Statement on Crypto
The President of the Federal Financial Supervisory Authority, Felix Hufeld, recently released an official statement on the regulatory place of his agency in the changing cryptocurrency and blockchain community. He elaborated to say this his authority is not primarily tasked with protecting individual investors, but is instead mostly concerned with preserving the stability of the general financial system.
He made it clear in his statement that BaFin is still interested in protecting investors, it would be nearly impossible for the agency to protect every single investor in danger as a result of the crypto community’s proclivity to violations and fraud in recent years. The crypto community has been slow to embrace the concept of central regulation of their decentralized currencies, citing both philosophical and practical concerns to oppose the increasing movement by governments to regulate.
The head German financial regulatory authority in the country’s recent remarks should give investors and startup leaders alike some much-needed guidance on the ways that the industry might face regulation on the part of the BaFin in coming years. Hudeld characterized the technology as disruptive, but also found that it holds significant potential for innovation in a variety of fields.
Specifically, the President outlined that the skepticism regarding blockchain technology could closely resemble the misplaced skepticism of regarding the internet exercised by Bill Gates, who initially called the technology “overrated hype.” Eventually, he was forced to recognize that he was in error, and that the internet technology allotted millions with opportunities of all sorts.
The brief statement answered a lot of questions, espousing many rumors involving the potential role that the agency might play in protecting individual investors and helping to prevent fraud from hustlers on the market. While he found that the potential of blockchain technology is massive, concerns of investors stemming from the lack of protections continue to prevent mass adoption by the financial and investment communities.
Additionally, the authority failed to make any remark on the future of the currencies. He remarked that he was skeptical of them, saying that the biggest dangerous potential uses of decentralized digital currencies could very well be in the illicit industries of money laundering, and even in the anonymous funding of massive terrorist operations all over the world. The blockchain’s decentralized and anonymous nature makes it the perfect facilitator of a variety of financial crimes.
A History Of Regulatory Statements
This isn’t the first time Hufeld has voiced his opinions on behalf of Germany’s biggest regulatory agency. An April speech by the organization regarding the future of blockchain technology outlined his belief that the technology needs to find a way to limit the major risks associated with its use without taking away from the massive opportunity that the technology provides to the financial community, as well as a variety of related industries all over the private sector.
In Germany, the future of the crypto community is partially dependent on the willingness of financial regulators to balance the need for regulation with the demand for responsible understanding of the technology which they seek to regulate.