Today, Germany’s Federal Ministry of Finance (BMF) announced the German cabinet approved its draft legislation on electronic securities, which includes blockchain-based securities. This comes soon after the introduction of the draft in August this year. We assume the legislation still has to go through parliament.
The law will mean it will no longer be required to have a paper stock certificate, allowing for digital securities or tokens to be recorded on an electronic ledger and enabling digital custody. The aim is to protect investors while ensuring the integrity, functionality, and transparency of Germany’s financial markets. This also helps Germany reach some of its blockchain strategy goals set last year, which includes supporting the technology.
“We are driving the digitization of Germany’s financial center with electronic securities. The paper certificate may be dear to some for nostalgic reasons, but the future belongs to its electronic version,” said German Finance Minister Olaf Sholz said. He also mentioned the administrative benefits of electronic securities and the importance of digital innovation in strengthening Germany’s capital market.
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