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The FinmadiG introduces material implementation measures for the European Digital Finance Package.

By Axel Schiemann and Lasse Winzer

On 18 December 2024, the German Parliament (Deutscher Bundestag) has passed the Financial Market Digitisation Act (Finanzmarktdigitalisierungsgesetz — FinmadiG). The FinmadiG serves as the German implementation of several European rules, inter alia, Regulation (EU) 2023/1114 on Markets in Crypto-Assets (MiCA) and Regulation (EU) 2023/1113 on information accompanying transfers of funds and certain cryptoassets (FTR). Under the amendments introduced by the FinmadiG, the existing German regulatory framework for cryptoassets will transition to the European rules under MiCA.

Introduction of the Crypto Markets Supervision Act

A central component of the FinmadiG is the introduction of the new Crypto Markets Supervision Act (Kryptomärkteaufsichtsgesetz —KMAG). The KMAG primarily includes the implementation of the operational rules related to MiCA on a national level, in particular:

  • the competence and powers of the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht —BaFin) to supervise cryptoasset providers under MiCA;
  • a sanctions regime against violations of KMAG and MiCA; and
  • a limited timeframe for grandfathering rules for cryptoasset service providers with existing licences under the German Banking Act (Kreditwesengesetz — KWG) until 31 December 2025. An overview of the grandfathering periods under MiCA in the different EU Member States is available here.

Timeline for Full MiCA Application in Germany

MiCA will be fully in force as of 30 December 2024. The FinmadiG has passed the German Parliament less than two weeks before MiCA’s full application and ahead of the upcoming dissolution of the German Parliament following the collapse of the German governing coalition. As a next step, the FinmadiG will need to pass through the German Federal Council (Bundesrat), which will hold its final meeting of the year on 20 December 2024. Following approval by the German Federal Council, the FinmadiG will be signed by the German Federal President (Bundespräsident) and published in the Federal Law Gazette (Bundesgesetzblatt).

For an overview of the MiCA delegated acts, technical standards, and guidelines, please see our Markets in Crypto-Assets Regulation Tracker.

Latham & Watkins will continue to monitor and report on developments related to MiCA.