The financial regulator in Germany has issued guidelines for classifying crypto as financial instruments.

This move expands the definition of financial instruments to include all types of digital assets to add to the previous model that only covered security tokens.

in press release It was issued on Monday, in which the German Federal Financial Supervisory Authority (BaFin) described crypto as:

A digital representation of a value that has not been issued or guaranteed by any central bank or public body and is not necessarily linked to a currency defined by law and does not have the legal status of a currency or money, but is accepted as a medium of exchange by natural or legal persons, and can be transmitted, stored and traded electronically

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According to BaFin, its new classification aligns with guidelines from intergovernmental agencies such as the Financial Action Task Force (FATF).

The rating is a positive step in favor of crypto, which is added to the rating that appeared in the past few days in Australia where an Australian judge recently ruled that crypto is an investment tool, which means that cryptocurrencies can be used as collateral in the country.

The announcement of the new BaFin rating is part of Germany’s move to adopt the European Union Money Laundering Directive 5 (AMLD5) which began on January 1, 2020.

As part of the AMLD5 accreditation process includes changes in banking services in Germany, including the Law on Payment Supervision and Payment Services.

As part of the new BaFin guidelines, crypto custodians will need to obtain a license from the regulator to offer their services in the country.

Crypto exchanges already operating in the country without a license have until the end of November 2020 to apply for a license but they must demonstrate their willingness to do so before March 30, 2020.

Also, those already registered in other EU countries cannot automate with the same license from Germany.

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Instead, such systems must apply for approval to provide crypto services in the country.

Earlier in February 2020, reports emerged that BaFin had received crypto-custodian license applications from at least 40 banks.

Regardless of banks, some exchanges in the country are heavily involved in the crypto market, with the Stuttgart Stock Exchange – Germany’s second largest – recently adding a Bitcoin derivative product, the “Bitcoin Traded Product.”

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