Germany Sets Standard for Bitcoin Regulation

http://bitcoinmagazine.com/germany-sets-standard-for-bitcoin-regulation/

by guruz • 13 years ago

65 69 13 years ago

bitcoinmagazine.com

JonSkeptic• 13 years ago

Inter alia the following conditions must be met:

-Initial capital of 730.000 Euros

-Management must be professionally qualified

-A detailed business plan must be submitted

-Capital adequacy standards must be met

-AML mechanisms must be implemented

-Reports must be submitted to BaFin regularly

Well...are there any bitcoin exchanges that meet those requirements in Germany?

rb2k_• 13 years ago

bitcoin.de has some sort of cooperation with a German Bank:

https://blog.bitcoin.de/en/bitcoin-de-und-fidor-bank-ag-vere...

    As from the start of the cooperation, which will be
    activated upon the registration with the German Federal
    Financial Supervisory Authority, Bitcoin Deutschland GmbH
    will become Fidor Bank AG’s so-called “tied agent” to
    conduct the bitcoin trading for Fidor Bank AG on
    bitcoin.de.

That might help them with most of these things.

Fuxy• 13 years ago

Well the regulations are a pain but at least bitcoin will be more readily available if it gets recognized.

dmix2• 13 years ago

Why does every government agency dealing with business have an obsession with "detailed business plans"?

The key to regulating companies is clearly to require them to write 30 pages of creative writing detached from the reality of how the business will operate a few months later.

How about a few page summary of the business with profiles of the team members, or pitch deck, without all the useless detail.

rayiner4• 13 years ago

Governments think of the financial system the way ATT or VZN think of their cellular networks. Nobody is going to let you plug in your new cellular device with just a pitch deck about how it works.

Also: to filter out ponzi schemes and the like.

oleganza5• 13 years ago

"Ponzi schemes" are like "pornodrugterrorists" - just a pseudo-reason to protect the monopoly in the eyes of the voters at their own expense. Maybe if people were allowed to decide whether they want to pay for "protecting" them from ponzi schemes, we would know how these problems could be solved most efficiently. However, the taxes are not paid, but extracted, so we cannot really find out what is the better way to protect ourselves.

MoreConsiderate• 13 years ago

They want people with assets with something to lose, an aspect of the AML logic.

Houshalter2• 13 years ago

That's ridiculous. You shouldn't need millions to just trade bitcoins. Some of those requirements are arbitrary and needless hurdles like being "professionally qualified". And then some are just track people that use bitcoin and what they are doing with it.

Does this apply to all bitcoin companies like it said, or just exchanges?

iSnow4• 13 years ago

To those who exchange BTC for fiat or operate cryptocoin banks or any company in the financial business dealing with BTC.

As a bar owner who accepts BTC for beer, you are fine. However, the German Gov't has already declared they are set out to discuss how to tax companies that accept BTC.

PeterisP2• 13 years ago

What do you mean by "all bitcoin companies" ?

This regulation would apply just as normal financial service regulation - to companies that make bitcoin/money transfers on behalf of others, as a payment service provider (like paypal is regulated); that hold bitcoins on behalf of others (like any deposit-accepting bank is regulated) or those that buy/sell bitcoins from public (like currency exchanges are regulated).

Houshalter2• 13 years ago

That's better, but still ridiculous.

Rudism• 13 years ago

Forgive me if I'm just being ignorant on the matter (I'm not super familiar with Bitcoin), but wasn't one of the founding principles of Bitcoin the idea that it wasn't/wouldn't be regulated?

cinquemb5• 13 years ago

When you want to establish a business that trades between bitcoins and typical fiat, you are going to be regulated (maybe even just being a business would enable a government to d̶e̶m̶a̶n̶d̶ accept bitcoins as an income tax payment if such a business didn't trade between currencies).

As an individual trading and accepting bitcoins for goods with other individuals, you would be out of the scope of regulation, and because of the nature of bitcoins, you could make it scale to business like levels.

yxhuvud2• 13 years ago

Nothing stops the state for demanding tax payments in normal money regardless of if the income is in normal money or not.

This do happen in real life quite often when people are not paid in cash.

joe_the_user2• 13 years ago

When you want to establish a business that trades between bitcoins and typical fiat, you are going to be regulated.

Yes, that is what the state does.

Yeah but your chances of running such a business and, say, not collecting the sales taxes for your area just went down a few notches. Bitcoin transactions are public, more public than, say, paper currency transactions.

And to answer the gp's original question, this does contradict the original intention of bitcoins. Failed or succesful, bitcoins are losing the specialness that was their original pull. Well, suck on it. The original intention was a la, la land phantasy, a fundamentally impossible Libertarian Party wet-dream.

Bitcoinist never figured out whether their cry was "they can't stop us", "they won't (try to) stop us" or "they shouldn't stop us". The result - the state clearly can stop bitcoin but so prefers to just control it.

I had imagined the whole thing would just collapse but I suppose it may just wind-up a fully regulated cash transfer system. But money still depends on the state.

jlgreco2• 13 years ago

Personally held bitcoins are not regulated in the same way that personally held cash is not regulated. That is to say, it is regulated... but (depending on how you acquire/spend your bitcoins or cash) it works on the honor system.

Think of waiters receiving cash tips.

joe_the_user2• 13 years ago

Paper money is private. Bitcoins are public (connecting wallets to people is a challenge but with whole Internet tapped, maybe not a huge challenge).

lmkg• 13 years ago

Ehhh... One of the founding principles was that it doesn't have a central issuing authority. The supply of bitcoin can't be controlled, which makes it immune to politically-convenient devaluation or debasement, unlike government-issued fiat currency. Or in laymen's terms: The fed can't just print more bitcoins.

Starting from the above, an extended game of Telephone resulted in some people thinking that Bitcoin can't be regulated at all. This is a silly belief.

cracker_jacks3• 13 years ago

Can you explain how can bitcoin be regulated? Regulation defined as the ability to control transactions.

vl• 13 years ago

The fed can't just print more bitcoins.

Mmm, they kinda can: they can deploy a large cluster, let's say 90% of capacity, hoard mined coins, then release them at once - booms, effect is not that different from printing.

oleganza5• 13 years ago

Once the person sells euros for bitcoins, he can spend these coins much more easily anywhere. He can:

1. Mix coins with others to make it impossible to trace where he spends them.

2. Pay someone for labour.

3. Buy any digital product or service online from anyone in the world.

4. Buy something delivered to his door via postal service.

5. Pay for small purchases like with cash.

6. Buy some assets in another country.

Each of these activities are really hard to monitor or affect.

Some activities are easier to regulate. If you are going to buy some AAPL shares or a house, you'd have to tell government something about yourself or the source of your income.

ferdo10• 13 years ago

Thus far, government efforts to regulate ones and zeroes haven't met with great success.

iSnow4• 13 years ago

Regulation is not about the ones and zeros but about the conversion of € to BTC and account keeping.

Both account keeping and converting one currency into another are well understood problems for regulators.

ferdo10• 13 years ago

Regulation is about control, which is what Germany is now trying to do with Bitcoin. I suspect the regulators will fail with regard to control of Bitcoin in the long run.

rayiner4• 13 years ago

Almost all traditional finance today is just ones and zeros, and its all quite successfully regulated.

ferdo10• 13 years ago

Bitcoin's ones and zeroes don't originate in a central bank.

VMG2• 13 years ago

Traditionally, they can point guns at the guys running the servers and tell them what to do (Liberty Reserve)

Not so easy with Bitcoin

ton10• 13 years ago

What about alternative coins? http://coinmarketcap.com/

yxhuvud2• 13 years ago

The article mentions Litecoin and Ripple as well, so regulation would probably apply to them as well.

mrb• 13 years ago

Note that the reporting on this story is not very clear. Those requirements listed (730,000 EUR minimum capital, etc) are only for Bitcoin exchanges. These regulations do not apply to, eg. businesses merely selling products/services for bitcoins.

perlpimp• 13 years ago

Hm interesting, I wonder if bringing such rules to the bitcoin currency trading, at least in Germany would somewhat legitimize it. Stricter requirements might dissuade some but on the flip side of the coin it may well bring even more serious players to the bitcoin market thus making it more substantial and well balanced. Just guessing though.

my 2c.

Germany Sets Standard for Bitcoin Regulation

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