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German Ministry of Justice wants to anchor crypto in civil law

Crypto transfers could be regulated in the future with the help of the German Civil Code (BGB).

By Mike Hesp
• 2 min read
German Ministry of Justice wants to anchor crypto in civil law

Crypto transfers could be regulated in the future using the German Civil Code (BGB). The Ministry of Justice is currently studying a corresponding proposal.

Crypto regulation in the German Civil Code

The German Civil Code (BGB) is a cornerstone of the German legal system. It covers, for example, the transfer of rights and property between people and could also include cryptocurrencies in the future. As a spokesperson for the Federal Ministry of Justice (BMJ) confirmed, the authority is currently "exploring how the legal framework for the civil-law transfer of crypto assets can be improved" as part of the Future Financing Act.

Moritz Schildt of Bundesblock welcomes the ministry's push. Representing the Blockchain Association, he took part in several ministry discussion rounds. "In general, it's about creating a legal basis in civil law in Germany to transfer cryptocurrencies in a legally safe way." Germany could take the lead on this. "To my knowledge, no other country handles these issues in civil law," Schildt says.

Regulation will become visible in 18 to 24 months

But it will probably take a while before the first crypto provisions appear. "18 to 24 months," Schildt estimates. Also it's not yet clear whether a regulation is even needed. We're in "new regulatory territory" here.

The BMJ has already proposed some concrete ideas. For example, it proposed a central registry where blockchain transactions would be documented in law again. Crypto associations rejected this proposal, however. State oversight of "reliable blockchains" also found little support. Ultimately, users should decide which blockchain they trust for transactions, according to Schildt. The state should not interfere in it.

In general, the Federal Republic has long been pushing for more crypto regulation. For example with the crypto custody license. That set rules for providers who hold cryptocurrencies in custody for clients. The license would also inspire the recently passed MiCA regulation. With the aim of anchoring crypto in the German Civil Code, new standards could be set again, according to Schildt.

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