German Regulators to Adopt Blockchain for Digitized Securiti...

German Regulators to Adopt Blockchain for Digitized Securities

Authorities in Germany revealed that the emergence of digitized securities is among the principal aspects of the federal government’s blockchain strategy. 

An official statement revealed the efforts of the country’s federal regulators towards the modernization of securities using blockchain technology.

The country’s Federal Ministry of Finance (BMF) and the Federal Ministry of Justice and Consumer Protection (BMJV) presented a draft bill on blockchain-based digital securities on August 11.

The purpose of the draft law is modernization of German securities law and the related supervisory law. Likewise, the law will address the implementation of the joint key issues noted by BMF and the BMJV on electronic securities.

Currently, legislation in the country stipulates securing financial instruments classified as securities in a document. According to the BMF and BMJV, the adoption of blockchain technology would guarantee liquidity and compliance through the provision of a replacement for the paper certificate.

“The paper certificate is the point of contact for the transfer facts under property law and it bears, among other things, the traffic protection of potential buyers account.”

Further, the authorities noted that the proposed draft bill will bring about improved regulatory clarity, as it stipulates that the Federal Financial Supervisory Authority (BaFin) will become the principal regulator for blockchain-based e-stocks space.

BaFin, the financial regulatory authority for Germany, will be keeping track of the issuance of digitized securities and maintaining decentralized ledgers based on the stipulations of the German Banking Act, said the official statement.

Numerous international jurisdictions have recorded progress regarding digitized securities powered by blockchain. Last month, a U.S. firm introduced Ethereum-based trading for a new fund majorly made up of shares of U.S. Treasury securities.

Similarly, two months ago, Tokai Tokyo Financial Holdings, a leading long-established financial institution in Japan, revealed its plan to introduce a digital security exchange in Japan. The firm intends to adopt blockchain technology to issue digital securities.


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