Germany’s Federal Ministry of Finance published regulations on public offering of certain cryptocurrency tokens and electronic securities on 08 March.
The Federal Ministry of Finance also collaborated with the Federal Ministry of Justice and Consumer Protection of Germany. The report notes that regulatory measures will strengthen the role of the government. Germany is also aiming to be one of the leading digitization and FinTech destinations.
The report cites that electronic securities should be open to German law. This implies that the present mandatory documentary representation of securities would no longer apply without restriction.
According to the report, the regulation of electronic securities should be neutral from the perspective of technology. The issue of electronic securities should also be made possible on the blockchain.
The report further quoted that –
“Initially, the opening should be limited to electronic bonds. The introduction of the electronic share should not be dealt with at this time. The regulatory burden that would be necessary would preclude a timely introduction of electronic security.”
The report states that crypto-tokens have been offered to a significant extent in recent years, as part of Initial Coin Offering (ICO). Since crypto tokens do not represent investments, the existing market regulations will not have control over the issuance of these digital assets.
However, citing the risks posed by investments in crypto tokens, the Federal Ministry of Finance also put the regulation of ICO for discussion in the key issues paper.
The report specifies that before drafting the bill; the Federal Ministry of Justice, the Federal Ministry of Finance and Consumer Protection will come up with a complete picture of the measures contained in the key issues paper.
Recently, the Luxembourg Parliament amended a blockchain bill into law to encourage the use of blockchain technology in financial services. The new Law aims to provide financial market members with more transparency and legal assurance about the circulation of securities.
More European nations are gearing up for utilizing blockchain in financial technologies. Many nations are working on regulations which can enhance the blockchain acceptance in various sectors.