Our editor Daniel Hoppmann asked representatives from the SPD, CDU, FDP, the Greens and the Left on the subject of blockchain.
This is what CDU, SPD, Greens, FDP and the Left say about Bitcoin and Co.
We are currently living in the age of the crypto renaissance. Bitcoin in particular, as the flagship of cryptocurrencies, basks in the attention it receives through its regular highs. The digital store of value owes this fact above all to the entry of institutional investors such as MicroStrategy, Square and Tesla.
The crypto industry as such is also prospering. In December last year, the EU Observatory for Blockchain published its first report, in which it found rapid growth in the industry. In Europe, Berlin is considered a real crypto and FinTech stronghold alongside the Swiss crypto valley. There is no doubt that technology has the potential to usher in a new digital age. But legal framework conditions must be created for this. So it’s time to ask the parties in the Bundestag what their positions are in relation to cryptocurrencies and blockchain technologies. In an interview with BTC-ECHO give experts of the parliamentary groups of the CDU (Matthias Hauer), SPD (Jens Zimmermann), FDP (Frank Schäffler), the Greens (Danyal Bayaz) and the Left (Fabio de Masi) Information about the positions of your parties, which Bitcoin maximalists are likely to disappoint.
Bitcoin, the “most inefficient means of payment ever”
In agreement, the parliamentary groups tend not to see Bitcoin as a means of payment. According to the Greens, the infrastructure of the cryptocurrency is not suitable for the masses due to the low transaction speed. The SPD shares these concerns. In light of this, both parties should consider looking up the term “second layer” again.
For the CDU, the high volatility of Bitcoin in particular provides the main argument to view its use as a means of payment with skepticism. The FDP believes that a high exchange ratio between crypto and fiat money would make the respective cyber currency unsuitable as a value date for everyday use.
Left MP Fabio de Masi is of the opinion that Bitcoin is the “most inefficient means of payment ever”. The MP primarily criticizes the high power consumption and the limited amount of cryptocurrency.
Bitcoin as digital gold?
Due to the value-storing properties of Bitcoin, some refer to the cryptocurrency as “digital gold”. For example, JPMorgan used the comparison when the financial house forecast a future BTC rate of $ 146,000. In the case of the Bundestag parties, however, opinions differ.
The CDU and SPD contradict the gold analogy with the main argument of high volatility. In addition, the CDU told BTC-ECHO that Bitcoin had no historical experience. The coalition partners therefore see the cryptocurrency more as a speculative than an investment object.
The Greens and the Left also object. Bitcoin has no material value that could make it comparable to the precious metal. If confidence in the asset sinks, investors would quickly withdraw, which would be noticeable in the BTC price – the value-storing properties would then be gone.
Only the FDP holds against it. Even if the Liberals acknowledge the concerns about historical experience, BTC is actually a kind of “digital gold”. In addition, the digital store of value offers other advantages. Bitcoin is easier to store and transport. Gold, for example, has the disadvantage “that it is difficult and not so easy to cut into pieces”. The cryptocurrency does not have this problem. In the eyes of the FDP, however, both stores of value have their raison d’etre.
Then why Bitcoin investments from institutional investors?
If you consider Bitcoin as an investment, the main focus of criticism is the high volatility of the asset. However, some companies, such as Tesla, appear to have taken this risk when they got into BTC. This commitment was noted by the CDU. It remains to be seen whether this will make the cryptocurrency a long-term future model.
Greens MP Bayaz thinks that Tesla and Bitcoin go well with each other:
“Two dazzling companies, each of which attracts a lot of attention in their branch, come together. This is obviously a great story for the capital market. What exactly is behind it will be seen. ”
However, the comparison lags, since Bitcoin is not a company, but a decentralized open source project.
Frank Schäffler from the FDP goes even further. Elon Musk, in his opinion, is someone who many in the financial and business world would look to. That is why his Bitcoin investment has a signal effect.
The left cannot agree to this. The Bundestag member Fabio de Masi remains skeptical even after the Tesla investment:
“Bitcoin is not an efficient means of payment just because Elon Musk accepts Bitcoin.”
The adaptation of cryptocurrencies and blockchain technologies
In addition to institutional investors, more and more private investors are also interested in digital assets. A report from Binance research illustrates the development of the adaptation of crypto assets based on the users. While in the second quarter of 2017 there were still just under 6 million users, this value rose continuously by 1,683 percent to 101 million “Hodlers” by the third quarter of 2020.
It can therefore be assumed that this number will continue to increase in the future. In Germany, the acceptance of crypto currencies is still relatively low compared to other countries. According to an investigation by the data portal Statista only five percent of those surveyed stated that they hold or have already owned cryptocurrencies. One reason for this could be the lack of regulation by the legislature.
To tackle this problem, the government coalition of the CDU and SPD jointly developed the blockchain strategy. In it, the federal government explains what measures it would like to take to make Germany more attractive as a business location for the blockchain industry. Among other things, the government relies on promoting innovation and creating uniform framework conditions. CDU MP Matthias Hauer thinks that blockchain technology could also be used in the public sector. In this way, for example, you can prove the authenticity of documents or licenses in the future.
In addition, with the Law on the introduction of electronic securities (eWpG) introduced a type of digital register that made the traditional paper certificate partially obsolete.
The opposition is skeptical about the government parties’ commitment to adapt. For example, Green MP Bayaz said:
“The federal government came up with the blockchain strategy late, but at least came up with something to bring the topic forward. […] With the Law on Electronic Securities, we get the first framework legislation – but many questions about taxation and classification still remain unanswered. “
Frank Schäffler also demands this from the FDP. It is time to create the regulatory and tax framework. In addition, the Liberals criticized the eWpG at the end of January. On the one hand, digital shares were not taken into account, and on the other hand, the registration requirement excludes the entire DeFi sector. Germany is losing its locational advantage, it says in the letter.
Jens Zimmermann said in an interview with BTC-ECHO that the criticism was acknowledged: You have to become more agile in such areas. The aim is to gain experience with the current law and readjust it if necessary.
“In markets that change so quickly, I think it’s imperative that you don’t cling to something cramped.”
Cryptocurrencies as a means of financing criminal activities
One of the main arguments that critics have against cryptocurrencies is the use of the assets to conduct money laundering or terrorist financing. Such accusations are also made in politics. The report from the US analytics firm Chainalysis however, invalidated these allegations. Only 0.34 percent of all crypto transactions are of criminal origin. However, these figures should be treated with caution, because studies are also circulating that estimate the proportion many times higher.
According to Zimmermann, the problem here is that there is likely to be a high number of unreported cases. A large part of the support is still processed in fiat currencies, but due to their properties, crypto currencies are quite suitable for disguising transactions.
On this point, the Greens are calling for digital payments, crypto currencies and the actors behind the accounts to be made comprehensible from a certain threshold, analogous to regulations for cash.
Indeed, it was not until mid-February that the federal government introduced a new upper limit (1,000 euros), with the resolution of the “Transparency Financial Information Act on Money Laundering” (TraFin Gw), from which crypto transactions are notifiable. Matthias Hauer from the CDU says in this context:
“We want to transfer the advantages of blockchain technology from the shadow economy to legal and reputable business models.”
CBDC as the means of payment of the future
When asked which means of payment will dominate in the future, a majority of the party representatives believe that it is likely to result in digital central bank currencies (CBDC). For example, the Union supports the introduction of a digital euro. In Europe, they have recognized the value of their own, cross-border and digital payment processing system based on their own standards. The aim is to create a counterweight to private currency projects such as Facebook’s “Diem”.
The SPD, the Greens and the Left also join in. There is a consensus that the monopoly of money should remain with the state.
Frank Schäffler from the FDP sees it differently:
“I’m skeptical because I don’t think the ECB can do it. Many fundamental questions of monetary policy arise from the introduction of a CBDC. Central bank money is currently the cash and book money that banks deposit with the central bank. The latter are pure booking items and are based on the banks’ money creation through lending. A digital central bank money for everyone is a foreign body in such a system, which is not so easy to implement. Financial stability is threatened rather than improved. “
The Federal Republic of Germany does not yet have an answer to some questions regarding the use of crypto currencies and blockchain technologies. Many investors want regulatory clarity, especially in the tax area. In view of the current Corona situation, these points are unlikely to enjoy a particularly high priority on the agenda at the moment. This year is super election year. After the federal election in September, the course for the future of the blockchain sector should be set again.
Disclaimer
This article appeared in the April issue of our monthly magazine Cryptocompass. This way for more information about subscription and Co.