Coinbase, a cryptocurrency exchange based in the United States, has announced the launch of Coinbase Germany to serve the German market.
According to the Coinbase blog:
“We are pleased to announce that Coinbase Germany GmbH has been granted a licence for crypto custody and trading by the German Federal Financial Supervisory Authority (BaFin) under the new licencing framework that went into effect in January 2020. Coinbase Germany is the first company to be granted a licence under the BaFin licencing system in the European Union.”
Coinbase Germany will provide secure and regulated access to the crypto-economy to institutional and end clients. With a staking offer and German earn rates, the crypto platform is expanding its product portfolio, allowing German users to earn passive money from their cryptocurrency. Additionally, in the long run, German-speaking customer service and choices for institutional customers will be expanded.
All services provided by Coinbase Germany are regulated by the German Federal Financial Supervisory Authority (BaFin). For German consumers, staking is now available on Coinbase. Owners of cryptocurrencies use staking to make their coins available for verification.
Coinbase announced on June 29 that it had obtained the first crypto licence in Germany.
Companies that provide crypto custody services in Germany were obliged to apply for new licences or discontinue operations in the country under legislation passed by the German parliament in 2019. The new law went into effect on January 1, 2020, and includes specific restrictions for businesses that provide crypto-related services. While Coinbase is the first company to acquire a licence, Handelsblatt, a German news site, anticipates that the new bill’s legal clarity will encourage more German banks to offer crypto-asset services.
The efforts of Coinbase to comply with government rules are not confined to Germany. The company announced last week that it will be launching a new product.
Coinbase posted Q1 profits of $771 million, more than triple its earnings from the previous quarter, after going public via a direct listing in April. As Coinbase develops into new areas, maintaining a solid foundation with regulatory support remains a primary focus.
Other cryptocurrency exchanges, in contrast to Coinbase, have been criticised for their lack of regulation.
Binance was been issued a second warning by Japan’s Financial Services Agency for operating without a licence (the exchange had been warned about operating without registering in 2018). Furthermore, Binance was recently barred from offering crypto derivatives in the United Kingdom by the Financial Conduct Authority.
It remains to be seen whether Binance’s lack of regulation will have a long-term impact on the company’s operations. Companies that provide crypto services, on the other hand, will need to tread carefully as crypto acceptance grows in order to avoid regulatory wrath.