Federal government presents draft bill to introduce electronic

Federal government presents draft bill to introduce electronic securities

The Federal Government has presented a draft bill to open up German law in general to electronic securities without a certificate.

The German government plans to introduce purely Crypto Trader electronic securities in Germany and has presented a draft bill for this purpose, according to a press release issued by the Bundestag on 25 February.

Electronic securities without a certificate

In a first step, the plan provides for the possibility of issuing promissory notes purely electronically, as well as share certificates on a smaller scale. Technology neutrality is supposed to allow flexibility and exclude a favouring of blockchain systems over other electronic forms of issuance.

The draft law provides for the abolition of a previously required securities certificate, which is to be replaced by an entry in a securities register. In doing so, it is to be „clearly stipulated that electronic securities are to be treated like things, so that owners enjoy the same protection of ownership as in the case of securities certificates“.

As the German government writes in the draft law, it should not wait for EU-wide harmonisation, „especially since other EU member states have already enacted regulations on the use of blockchain technology for financial instruments“.

Part of the blockchain strategy

The plan to introduce electronic securities is part of the blockchain strategy adopted in September 2019. By the end of 2019, Germany had already added crypto securities to the list of regulated financial instruments by implementing the fourth EU Money Laundering Directive. Since then, the existing regulatory provisions for other financial instruments have also applied to crypto-tokens, resulting in a BaFin authorisation requirement for wallet operators and other crypto custodians, for example.