The German government has passed new legislation to introduce fully electronic securities as part of the country’s broader blockchain strategy. According to the Ministry of Finance, the new law relaxes the rules that require issuers and holders of securities to document transactions with a paper certificate.
According to an reportthe paper certificate can now be “replaced by an entry in a central securities depository or a register kept by private sector banks”. The report also speculates that this means that “an entry into a crypto securities register based on blockchain technology is now also possible.” German government officials say the law would provide legal clarity and increase the potential of the new technologies.
German Finance Minister Olaf Scholz praises the new law, which points to the cost-effectiveness of electronic securities over traditional paper securities. Scholz also explains the importance of moving with the times by saying:
The paper certificate may be dear to some for nostalgic reasons, but the future belongs to its electronic version.
Following Scholz’s feelings, the country’s Minister of Justice Christine Lambrecht is now. The cabinet member expresses confidence that the digitization of the financial market will accelerate through the use of the blockchain. She adds that the passing of the legislation “significantly increases the innovative potential of these technologies for the German financial center”.
Meanwhile another one report says Germany’s staged approach to electronic securities seems cautious, but “also seems to go further than other European countries that already allow electronic securities.” For example, while France has allowed blockchain-based securities trading for two years, this only applies to “unlisted securities that do not use existing securities settlement systems.”
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