Editor's Note: This article comes fromCointelegraph Chinese (ID: CointelegraphChina)Editor's Note: This article comes from

Cointelegraph Chinese (ID: CointelegraphChina)

, Author: VERONIKA RINECKER, reprinted by Odaily with authorization.

Germany has a very diverse and active blockchain ecosystem, including companies and blockchain enthusiasts (especially in Berlin). The German Federal Government has taken an important step in the development of this ecosystem, trying to protect and promote this vibrant blockchain ecosystem so that it can continue to grow and make Germany an attractive location in this field. Investment Opportunities.secondary titleComprehensive and robust regulationTo further this goal, the German government in September 2019National Blockchain Strategy Adopted

, in support of its commitment to use the technology. The 44 individual measures contained therein will be implemented by 10 federal ministries by the end of 2021. Exactly one year later, in September 2020, according to the German Federal Association for Information Technology BitkomPublishedAccording to an assessment report, 17 measures have made great progress, 20 are still in progress, and the remaining 7 measures have not made any progress.Germany implements this blockchain strategy in 2020, along with the EUFourth Anti-Money Laundering Directive

, has had a profound impact on blockchain startups, fintech companies, banks, crypto exchanges, and industrial companies. As of January 1, 2020, the custody of encrypted assets and their transactions need to obtainLicense issued by BaFin. The BaFin license applies to all companies that hold or trade crypto assets such as Bitcoin (BTC) and Ethereum (ETH), ranging from cryptocurrency custody providers to cryptocurrency exchanges. Therefore, from 2020 onwards, crypto asset businesses in Germany are subject to the high regulatory requirements and standards that have existed in traditional capital markets for decades.

One of the most important regulatory measures of 2020 was the adoption by the German Federal Cabinet in December of theLaws Concerning Electronic Securities Issuance. According to this law, Germany will also support the issuance of securities by purely electronic means in the future.

Another important step in the direction of regulation is the European Commission's September 2020 legislative proposal on crypto-securities, known as the "

, the regulation is expected to come into force in 2022 and will create legal transparency and certainty for crypto asset issuers and providers across the EU.

Currently, before the MiCA regulation comes into force, companies often have to adapt their international business models individually to each EU member state, which can lead to high costs. Harmonized pan-European regulations, such as the MiCA regulation, can reduce complexity and uncertainty for crypto service providers and improve the situation for market participants.

Such broad regulation can be a significant challenge for startups, but it also presents an opportunity for professionalization across the crypto ecosystem. Some people mistakenly think that regulation is a "stop sign" for cryptocurrencies, stablecoins, and crypto exchanges. Instead, Germany’s regulatory structure is designed to place crypto assets on an equal footing with existing financial products. Unprofessional start-ups and unreliable providers may thus be driven out of the German market. Startups in a good position can find a solution and move on.

secondary titleMost importantly, the new rules make it easier to invest in crypto assets, which has contributed to the boom in crypto financial services in 2020. Several companies and banks have built the relevant technical infrastructure for professional trading of Bitcoin and other cryptoassets.andThis has prompted more diversified products on digital assets in 2020. For example, financial services in the crypto space include tools to track the price of bitcoin or the market for retail investors. Now, fully regulated trading venues for professional investors are emerging, such asDigital currency exchange in Stuttgart, Germany

and

Bankhaus Scheich

. Some banks are also positioning themselves as backend-as-a-service platforms. For example, German digital bank Solarisbank and Bankhaus von der Heydt (BVDH), one of the oldest banks, provide other financial institutions with the regulatory and technical infrastructure to enable their clients to use crypto assets.

At the end of 2020, German private bank Hauck & Aufhauser also launched its crypto asset and digital asset custody service.

Some fintech projects, such as Bison and startup Bitwala, target private investors and support 24/7 cryptocurrency trading.

All of these companies provide a great entry point for professional and private investors who may want to invest in Bitcoin and other crypto assets. With a solid regulatory foundation and more players, we expect 2021 to be an interesting year for the young crypto industry.secondary titlePublic and investor acceptance remains lowAlthough current regulation ensures more legal certainty, financial service providers offer a wide variety of services and due toBitcoin's price changes rapidly

, still very few Germans are interested in this cryptocurrency. according to

A survey conducted by Bitkom in December 2020

According to the survey, only 2% of Germans over the age of 16 have invested in Bitcoin or other cryptocurrencies. However, nearly one in five respondents (18%) can imagine making such an investment in the future.Most respondents are skeptical of Bitcoin and other cryptocurrencies. Cryptocurrencies still sound too technical and complicated for two-thirds of respondents (66%). Almost as many (65%) think cryptocurrencies are too speculative. However, three in 10 (30%) respondents said cryptocurrencies could be a safe alternative to the existing monetary system. Among younger respondents between the ages of 16 and 29, it was 43%. About a quarter (28%) of respondents believe that cryptocurrencies are worth long-term investments.Clearly, there are major differences in acceptance of digital assets between generations: German youth are more open to cryptocurrencies. It is this target group that still offers great potential for the German crypto market. Increasing regulation and professionalization of the local cryptocurrency space, and

Large companies such as PayPal

And the support of global central banks and commercial banks will also promote the acceptance of cryptocurrencies among German investors and others.

secondary titleEnergy and digital identity: areas of national importanceGerman blockchain startups cover a variety of use cases and domains. However, most startups focus on the financial sector (already mentioned above), followed by industries such as entertainment, digital identity, IoT and energy.The energy sector is of particular interest to the German blockchain ecosystem in 2020. There, practical research and development of blockchain technology is promoted, including a dedicated pilot laboratory"Future Energy Lab"

. Use cases range from providing blockchain-based virtual mass storage for operators of photovoltaic systems (e.g.

) to energy transactions via blockchain technology.SpherityandLissiDigital identity is another important area for the state in 2020 and 2021. So-called self-sovereign identities, or blockchain-based decentralized identities, offer users another option to take control of their own data and the data economy in the digital age. Many German companies such as

and

are actively researching this concept. The German government is also funding individual pilot projects as part of its “Digital Identity Demonstration” project, one of many measures in the national blockchain strategy.

secondary title

Education and networking, even in the age of COVID-19However, it is not only the government that is active, the local blockchain community is also paving the way for development in Germany. The community is made up of experts and enthusiasts as well as associations such as Blockchain Bundesverband, European Blockchain Association and BerChain. All of these are aimed at promoting blockchain solutions and projects in an organized and systematic manner.The German blockchain community is large, consisting of around 150,000 participants. There are currently more than 180 blockchain startups founded or with branches in Germany, most of which are based in Berlin.

Together with the German government, the community promotes application-oriented research in the blockchain field. This includes work carried out in the scientific community, for example led by the Max Planck Society

, as well as work done in collaboration with the private sector, such as the Fraunhofer Blockchain Lab. The Frankfurt School of Finance and Management has an academic training center for blockchain. This is one of the most important research centers in Germany. In addition to education and research, the Blockchain Hub provides a platform for managers, start-ups, and technology and industry experts to exchange knowledge and best practices.

A master's degree in the field of blockchain can be obtained through the Blockchain Competence Center (BCCM) of the Mitweida University of Applied Sciences. Additionally, BCCM regularly offers blockchain courses.

In addition to academic training, the community also organizes offline and online conferences, hackathons and meetups, such as Berlin Blockchain Week, the Crypto Assets Conference in Frankfurt and organized by the Frankfurt School Blockchain Center and the event advertised on Eventbrite Various online meetups such as Disrupt Network and CryptoMonday.

secondary titleGermany has a good chance of becoming a blockchain hotspotAll in all, the current crypto-friendly policies, broad regulation, and slow but growing acceptance of blockchain technology and cryptocurrencies could make Germany one of the most important blockchain hotspots in Europe and globally.

In 2021, the German start-up ecosystem will particularly benefit from the current blockchain strategy, as it aims to foster innovation, spread blockchain knowledge and contribute to Germany's goal of becoming a global leader in the blockchain space. To achieve this, several government-funded projects were implemented in 2020, such as a blockchain energy database for tracking electricity consumption,