Germany Passes Financial Market Digitization Act Ahead Of MiCAR Implementation

According to Odaily, the German Bundestag has approved the Financial Market Digitization Act (Finanzmarktdigitalisierungsgesetz or FinmadiG) this week. This legislative move comes in response to industry demands to ensure regulations are in place before the comprehensive implementation of MiCAR on December 30. The FinmadiG not only addresses cryptocurrency and MiCAR but also impacts other EU laws such as DORA and the Funds Transfer Regulation. For MiCAR, the act introduces the Cryptocurrency Market Regulation Act (KMAG), which replaces Germany's previous cryptocurrency regulations with MiCAR. Although MiCAR is technically a regulation and does not require local laws, legislation is necessary to designate BaFin as the regulatory authority. Without this, BaFin cannot issue licenses. This will enable EU companies with cryptocurrency licenses from other countries to operate in Germany, while German companies will not be able to operate across the EU. Additionally, MiCAR allows companies with existing licenses to continue operations for up to 18 months, with the transition period determined by each jurisdiction. Germany's new legislation sets this period at one year.