Germany’s Berlin to Leverage Blockchain for Government-Run Electronic Securities Register
Reuters has reported that Germany’s justice and finance ministries have proposed to launch a state-run register to advance the use of blockchain. The seven-page original guidelines attempt to create a register to organize the sector and shield investors from potential violations. The document asserts that regulation in the space could provide to the development of the technology behind cryptos, along with improving Germany’s situation in FinTech markets.
“The fact that other states also allow the use of blockchain technology for financial instruments will ensure its attractiveness to the local financial center through regulation in Germany.”
Although, the German government wants to develop the regulation in conjunction with existing European Union (EU) laws instead of developing a “German special way” that would have to be abandoned once the EU consolidates its blockchain and cryptocurrency regulations. EU has been notoriously infamous for taking a long time to enact. Considering this, it is expected to take a long time.
The Cabinet of Germany, which is the chief executive body of the nation’s government, said that the blockchain strategy that they plan to adopt will be officially introduced to the public by the middle of this year. The preparation of said guidelines is assigned to the Ministry of Finance and the Ministry for Economic Affairs and Energy. At a later date, other ministries that relate to these regulations are expected to enter the process.
Notably, Germany is contemplating revising current regulations that require financial instruments to have physical counterparts that investors can hold in their hands. Initially, these amendments will only affect electronic bonds. A law regulating virtual stocks will be considered later on. The proposal seems to be the primary phase of Germany's “blockchain strategy,” which was agreed upon during a March 2018 alliance harmony among Chancellor Angela Merkel's conservative Christian Democrats and the left-leaning Social Democrats.