Germany’s cabinet approved the law allowing the use of blockchain technology in securities transactions.
According to the German Ministry of Finance, the law eases the requirement that all transactions be filed on paper.
“The paper form is replaced by a registry maintained by a central securities depository or a custodian (central registry securities) or a decentralized, crypto-securities registry based on blockchain technology (crypto securities).”
According to German Minister of Justice and Consumer Protection Christine Lambrecht, the legislation will “create legal certainty in an area characterized by constant change”.
Transition to electronic securities
The new law now makes it possible to issue securities entirely electronically. According to German Finance Minister Olaf Scholz, the transition to fully electronic securities will increase efficiency.
“Electronic securities reduce costs and administrative work. The bill brings a major digital innovation to German capital markets. “
According to the country’s Ministry of Finance, the law will also make Germany attractive as an investment destination.
“The adaptation of the current legal framework for securities to innovative technologies, especially blockchain technology, will serve to strengthen Germany as a workplace and increase transparency, market integrity and investor protection.”
The German Ministry of Finance also stated that the legislation, introduced as a bill on August 11, 2020, will bring the government closer to implementing the blockchain strategy.