Today the German government released its 24-page blockchain strategy, showing a commitment to supporting the use of the technology. While focusing on financial applications, the document also outlines the national approach to blockchain project funding, sustainability, and digital identity. One key point is that the government will not support private stablecoins as an alternative to sovereign currency, implying that projects like Libra could be blocked.
The strategy broadly aims to ensure stability, stimulate and support innovation, protect data, and spread blockchain knowledge. Germany “sets itself the goal of exploiting the opportunities offered by blockchain technology and its potential to mobilize for digital transformation.” The country has clear ambitions to be a leader in the sector.
Indeed, it is working on various projects, including a blockchain-based energy database for tracking power usage, a system for verifying educational qualifications, and a smart contract registry with the German Energy Agency. The country is additionally piloting a state-wide digital identity system. Plus, it plans to release a study on the subject, looking at how to authenticate people’s devices, keep personal data safe, and ensure data integrity.
In finance, the document reveals that Germany plans to extend its laws to include electronic securities as early as this year. The strategy reads: “The regulation of electronic securities should be technology-neutral, so that future electronic value papers can also be issued on a blockchain.”
The government further hopes to develop its laws on the regulation of non-security tokens and cryptocurrency exchanges, concentrating on investor protection. A new ‘BaFin’ permit for exchanges will allow the trading of conventional crypto-assets.
However, Germany “will work at [the] European and international level“ to prevent private stablecoins from challenging sovereign currencies. Just yesterday, Benoît Coeuré of the European Central Bank discussed the possibility of Libra ‘overtaking’ the US dollar. There have also been concerns that the Chinese Yuan may suffer from the release of Libra. Now Germany has made clear it will take action to stop that from happening.
The strategy was released soon after the EU published its ‘Blockchain Now and Tomorrow’ report, which revealed that European policymakers are working on blockchain applications. However, Germany’s document is much more telling and shows numerous solid use cases along with specific current and future blockchain projects.