The German parliament passed the legislation required to fully implement the MiCAR, the European Union's encryption regulatory regulations.

The German Bundestag passed the Finanzmarktdigitalisierungsgesetz (FinmadiG) this week in response to industry demands to ensure legislation is in place before MiCAR comes into full effect on December 30. FinmadiG not only covers Cryptocurrency and MiCAR, but also affects other EU laws such as DORA and the Funds Transfer Regulation. For MiCAR, it introduces the Cryptocurrency Market Regulation Act (KMAG), which replaces Germany’s old Cryptocurrency rules. Technically, MiCAR is a regulation and does not require local legislation. However, legislation is needed to designate BaFin as the regulatory authority, without which 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 allows companies with existing licenses to continue operating for up to 18 months, with the transition period determined by each jurisdiction. Germany’s new legislation sets it at one year.