GERMANY Law and Practice Contributed by: Stephan D. Meyer, Lars Fidan, Elisa Otto and Christian Meisser, LEXR
10.13 Stablecoins MiCA provides a detailed regulatory framework for stablecoins. The regulation distinguishes between asset-referenced tokens (ARTs), which are backed by a basket of assets, and e-money tokens (EMTs), which are pegged to a single fiat currency. Both categories carry specific issuance, reserve management and redemption requirements. EMT issuers need authorisation as credit institutions or e-money institutions and must ensure that tokens are redeemable at par value at any time. Reserve assets must be held in secure, segregated custody. ART issuers require BaFin authorisation and must maintain a reserve of assets corresponding to the tokens in circulation, subject to composition and cus - tody requirements. In 2025, BaFin approved Germany’s first euro-denom - inated stablecoin under MiCA, issued by AllUnity – a joint venture between DWS (Deutsche Bank), Flow Traders and Galaxy Digital. This milestone under - scored Germany’s position as a leading jurisdiction for regulated stablecoin issuance. Significant stablecoins, as determined by ESMA and the EBA, are subject to enhanced requirements including higher capital buff - ers and direct EBA supervision. For firms considering stablecoin issuance, early engagement with BaFin on the classification and reserve structure is essential. Open banking in Germany is built on PSD2, trans - posed into German law through the ZAG. The frame - work gives licensed third-party providers, Account Information Service Providers (AISPs) and Payment Initiation Service Providers (PISPs), the right to access payment account data held by banks, subject to the account holder’s explicit consent and strong customer authentication. Implementation has been uneven. API quality varies considerably across banks, SCA requirements have created friction in user journeys, and the scope of data access rights has been a recurring point of conten - tion between banks and third-party providers. BaFin 11. Open Banking 11.1 Regulation of Open Banking
has intervened in individual cases to require banks to improve their API interfaces, but the overall experi - ence has been one of gradual progress rather than rapid transformation. The PSD3/PSR package will reshape this landscape by removing the option for banks to maintain fall - back interfaces, mandating dedicated APIs with defined performance and functionality standards and strengthening fraud prevention in open banking trans - actions. Beyond payments, the Financial Data Access Regulation (FIDA) will extend data-sharing principles to savings, investments, pensions and insurance, moving Germany from open banking toward a broader open finance ecosystem. For fintech companies, this represents both a major opportunity and a new layer of compliance. 11.2 Concerns Raised by Open Banking Data privacy and security are the central tensions in open banking. Under GDPR, sharing personal finan - cial data requires a lawful basis, with explicit consent as the primary mechanism. Banks and third-party pro - viders must implement strong customer authentica - tion, encrypted data transmission and granular access controls. The practical challenges go beyond legal compliance. API reliability varies across institutions, data formats are not fully standardised, and the allocation of liabil - ity when something goes wrong in a multi-party data chain remains a source of friction between banks and fintechs. BaFin and the Federal Data Protection Com - missioner both exercise supervisory authority in this space, which can create overlapping expectations. DORA adds operational resilience requirements to the picture. API infrastructure must be treated as critical ICT, with corresponding risk management, testing and incident reporting obligations. The industry is mov - ing toward standardised API frameworks and secu - rity certifications, but full harmonisation is still some distance away. PSD3/PSR’s stricter API performance standards should accelerate this convergence.
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