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The general consensus among German regulators is that regulatory requirements applicable to the already known investment models can also be applied to CIS. By adopting the 5th AML Directive, the German lawmakers have somewhat clarified the legal status of cryptocurrencies & made cryptocurrency regulation in Germany less complicated. 

The said 5th Directive covers all potential uses of virtual currencies, including their use as investment tools. This also applies to different types of virtual units of value, coins or tokens.

P2P Lending

Applying regulatory rules to P2P lending depends on a specific business model. Entrepreneurs interested in setting up a crowdfunding platform in Germany should keep in mind that donation-based crowdfunding used to support specific projects isn’t subject to financial regulation.

However, if investors receive financial benefits through crowd-investing or crowd-lending, special rules may apply.

If a lender pursues commercial goals, they must obtain a financial license in Germany. Please note that accepting deposits is a licensed activity, too. These requirements may also be applicable to German crowdfunding platforms if they keep lenders’ funds until they’re transferred to one or more borrowers.

Consumer Protection

By concluding a direct agreement via a P2P lending platform, lenders undertake to fulfill certain obligations. Given that such sites usually offer their services online, their users should keep in mind consumer protection rules pertaining to distance selling.

Germany: Regulation of Payment Services

The revised PSD provides new opportunities for individuals seeking to register a fintech company in Germany. As part of the updated ZAG, 2 new types of payment services have been introduced: account information ones & payment initiation ones. Their providers can now access payment accounts in banks that maintain such accounts for their customers. This may be seen as a potential turning point, as traditional banks can no longer prevent their competitors from accessing customer accounts that have agreed to it

However, new business opportunities come with an additional regulatory burden. Providing payment services requires getting a financial license in the EU. The scope of this license has been expanded to include account information providers & payment initiation services.

Seeking to register a fintech company in Germany? Need advice on fintech regulation in Germany? Why not contact IQ Decision UK?