LocalBitcoins to Stop Operating in Germany Due to ‘Regulatory Reasons’

The announcement comes as a surprise since LocalBitcoins is not a German company, and Germany has, on the whole, been sensible with not trying to over-regulate Bitcoin use and adoption in the country. LocalBitcoins is a Helsinki, Finland based company and operates in several jurisdictions around the world.

The announcement was made in a Tweet posted by LocalBitcoins –

Not much else is known about what regulations LocalBitcoins would seem to violate in Germany and whether that may cause a precedent in other European countries. It is also unclear whether this is part of an overall regulatory reach by the German authorities and whether other Bitcoin startups in Germany are affected. Coinsetter News has reached out to LocalBitcoins for comment but hasn’t heard back anything at this stage.

LocalBitcoins has been an important part of Bitcoin adoption, especially before exchanges were popular. It also gave people a way to connect with other Bitcoin enthusiasts in their area, especially in the initial days of Bitcoin adoption.

German Bitcoin Regulation

Germany has, as a whole, adopted a wait-and-see approach to Bitcoin regulation, which has allowed the cryptocurrency economy to thrive in the country. Berlin had been a Bitcoin hub for several years now, with plenty of businesses accepting Bitcoin as payment. Adoption of Bitcoin has been very encouraging in Germany. In fact, Germany trails only the United States in the number of full Bitcoin nodes running in the country, according to Bitnodes, a site that tracks the location of all the Bitcoin full nodes that transmit data about new transactions in a peer-to-peer fashion, thus maintaining decentralized copies of the Bitcoin blockchain.

Officially, Germany recognizes Bitcoin as ‘private money’ and not as electronic money. Private money in Germany is more akin to a financial instrument than a currency. Even the banks have been more positive towards Bitcoin and cryptocurrencies. In fact, Fidor bank in Germany has the distinction to become the first bank to use the Ripple payment protocol.

Sid is a writer and blogger, with deep interest in Bitcoin and cryptocurrencies. He is the founder of BTC Geek and has several years of experience working in the finance and technology sectors in New York. He can sometimes be seen wandering the streets, trying to photograph the best the city offers.