Germany’s finance ministry said Angela Merkel’s cabinet passed a new law Wednesday to promote all electronic securities as part of its broader blockchain strategy.
The law aims to facilitate the rules that have so far compelled issuers and security holders to document transactions with paper certificates. Finance Minister Olaf Scholz said, “The paper certificate may be valuable to some for nostalgic reasons; But the future is in its electronic version, ”he said, adding that electronic securities reduce costs and administrative burdens.
According to the news in Reuters, the paper certificate can now be replaced with an entry in a central securities warehouse or with a registry held by private sector banks. It is also possible to log into a crypto securities ledger based on blockchain technology.
Justice Minister Christine Lambrecht said the law would provide legal clarity and increase the potential of new technologies.
Blockchain technology is a type of digital ledger where all the data in a transaction is stored in encrypted form. It is open to all users by providing a high degree of transparency. According to the news source, the blockchain is thought to be fraud-proof. Since each user manages a copy of the database, it is theoretically impossible to change it unnoticed.
“Blockchain technology has the potential to completely disrupt existing procedures and fundamentally change the way all industries operate,” said Achim Berg, head of the plant’s IT collaboration.