The Bitcoin payment processor BitPay has apparently got cold feet in view of threatening regulatory progress in Germany. Operations in the Federal Republic of Germany will be discontinued for the time being. Among others, Microsoft and Lieferando are using the services of the US-American company.
What do the countries Algeria, Bangladesh, Bolivia, Cambodia, Ecuador, Egypt, Indonesia, Iraq, Kyrgyzstan, Morocco, Nepal, Vietnam and the Federal Republic of Germany have in common?
They form the list of states that are not served or are no longer served by the US company BitPay. BitPay functions as a payment service provider through which merchants can offer Bitcoin as a payment option. For Germany it means now: could.
Withdrawal justified by German regulatory efforts
On July 29, BitPay released a brief update on the countries it no longer serves. On the one hand, these are countries that are on the sanctions list of the USA. But there are also countries in which Bitcoin (should) invest regulatory thumbscrews. Germany now has the dubious honour of listening to this club.
An inquiry remained unanswered for the time being. Meanwhile BitPay has returned. BitPay’s reply corresponds in wording exactly to a paragraph that the company added to its mail on August 1.
Related Information About Bitcoin:
BitPay strives to provide the best service to all its customers. We regularly monitor regulations and laws to ensure compliance. Germany has publicly stated that crypto companies should apply for a licence from 2020. We have shut down operations in Germany while determining the need for German licenses.
BitPay refers to the recently published bill of the Federal Government, which provides for a tightening of the regulation of companies in the crypto sector. From 2020, not only Bitcoin exchanges and wallet providers, but also payment processors who exchange Bitcoin and Co. for Fiat money (and vice versa) will be subject to the regulatory supervision of the Federal Financial Supervisory Authority (BaFin). The Bundestag wants to discuss the draft after the summer break.
Is BitPay just the beginning?
The premature – and possibly only temporary – withdrawal of BitPay from Germany marks a bitter setback for the Bitcoin adaptation. Numerous companies that accept Bitcoin payments have made use of the service of the US payment service provider. Among the best-known are Microsoft and Lieferando. The question now is whether the companies want to switch to another payment service provider, or whether they will delete Bitcoin as a payment option for the time being. At the time of going to press, the two companies had yet to respond to a corresponding request.
- BitPay is one of the leading processors of Bitcoin payments in Germany.
- It cannot be ruled out that other service providers will follow BitPay’s example.
- The uncertainty is too great in view of the regulatory measures that are in the offing.
- BitPay’s premature actions, however, allow a further conclusion to be drawn: namely that the business with Bitcoin payments in Germany is not worthwhile.
- It seems unlikely that the company would have withdrawn from Germany so quickly if turnover had flourished.
If the example of BitPay were to set a precedent, the German crypto community would have little choice but to “hoddle” Bitcoin & Co. for the time being. A disappointment for those who would rather see the vision of Bitcoin as digital cash realised yesterday than today. Anyone who regards Bitcoin as digital gold anyway will hardly be able to blink an eye at this fact.