Felix Hufeld, the President of the German regulatory authority, BaFin, has currencies in the last week, in a speech to Crypto and the Blockchain expressed. He also went in more detail on the role of his authority in the regulation of technology and applications. This Innovation must be encouraged, however, also financial stability are preserved.
On Thursday, the 7. In June, the President of the German Federal financial Supervisory authority (BaFin) in Berlin, a speech with the title “Bitcoin, the Blockchain: What’s Hype and what remains?”. As the title suggests, it went to a to the challenges that crypto-currencies represent from the point of view of the financial market regulator. On the other Hufeld language but also the possibilities of the technology, in his opinion, ready.
Hype or future technology?
“The question is, what is Bitcoin, and the Blockchain is just Hype and what actually has the substance to change the financial markets in a disruptive way, and I don’t want to answer at this point finally. Some of the assessments and observations I can offer to you as a Financial overseer, however.“
So Felix Hufeld a directs his remarks to the Blockchain. As the most well-known application of the Blockchain, he stresses the Bitcoin on behalf of all crypto-currencies. This he saw not as a currency, because in our jurisdiction the currency term way, classically the Central Bank money is reserved. Although the Bitcoin had therefore been created as an alternative currency, it is to be regarded rather as a unit of account.
The BaFin must-regulating action
BaFin, he sees the role of the regulator, which sets the necessary framework, thus, Blockchain and crypto-currencies safe can develop. To not going overboard and überzuregulieren, you want to first learn more about the technology. “Innovations need just at the beginning of space to develop. To allow them this space, a market economy,“ Hufeld its guidelines. From the fear of risks, not the opportunities may fall into the Background.
BaFin also wants to protect the interests of consumers and investors. Therefore, the Initial Coin, especially Offerings in the focus of the authority. The method of funding the ICO is so far unregulated, uncertain and highly speculative. The Maxim of the action, however, is not the protection of individual investors, but securing the financial stability and the avoidance of systematic harm to consumers.
The Blockchain is very versatile
The temporary gains of the crypto-currencies referred to Hufeld as a Hype, the Blockchain he sees it as something more stable. He mentioned Estonia and Sweden as examples, where the Blockchain is already being used in the field of public administration. The technology offers especially in countries with a low level of development, where structures are still under construction. He referred to the Blockchain for “some countries in Africa” as a “veritable quantum leap”, about the documentation of property rights.
But also in industrial Nations, the Blockchain can contribute to secure growth and prosperity. Specifically, the financial services industry as an obvious field of application is the key here. Small and medium-sized businesses can benefit from free cross-border payments without an intermediary. He also mentioned the areas of the promissory notes and insurance as areas of application for Blockchain applications such as Smart Contracts. He warns, however, against the temptation to look in the Blockchain is a solution for all the problems. One must ask themselves exactly who could benefit from the technology.
How to put the beginning of the speech clear, can not Hufeld say so exactly, where is the promise of the Blockchain stops and the irrational Hype begins. He is, however, a clear will on the part of the BaFin recognize. She wanted to promote the technology, where they can be profitably used. For the more serious part of the crypto scene this is good news.