German Parliament Passes Legislation Needed to Fully Implement EU Crypto Regulation MiCAR

The German Parliament (Bundestag) passed the Finanzmarktdigitalisierungsgesetz of FinmadiG this week. The parliament responded to industry requests to ensure that legislation is in place before MiCAR fully comes into effect on December 30. FinmadiG not only concerns cryptocurrencies and MiCAR, but also affects other EU laws such as DORA and the Fund Transfer Regulation. For MiCAR, it introduced the Cryptocurrency Market Supervision Act (KMAG), which replaced Germany's old cryptocurrency rules with MiCAR. Technically, MiCAR is a regulation, so no local law is required. However, legislation is needed to designate BaFin as the regulator, otherwise BaFin cannot issue licenses. This will allow EU companies with cryptocurrency licenses from other countries to operate in Germany, but German companies will not be able to operate in the EU. In addition, MiCAR also allows companies with existing licenses to continue operating for up to 18 months, with the transition period being determined by each jurisdiction. The new German legislation stipulates a one-year period.