Germany’s New Regulation Allows Tokenized Digital Shares for Crypto Market Revolution

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Key Takeaways:

  • New financial legislation in Germany would permit “testing of enhanced transferability of crypto assets.”
  • Public firms can choose between traditional and electronic share issuance for their stocks.

The “Future Financing Act” was announced by the German Ministry of Finance. The new laws will make it possible to issue “crypto shares” on a legal basis. 

Additionally, the act seeks to harmonize rules from tax laws, financial markets laws, and corporation laws. We want Germany to be the top site for startups and growth firms, according to Minister of Finance Christian Lindner. And he said:

“This is why we are improving access to the capital market and facilitating the raising of equity. Small and medium-sized companies will also benefit from this.”

Patrick Hansen, Circle’s director of EU strategy and policy, outlined the idea of crypto shares on April 5. Patrick further noted that the issue of tokenized bonds and money is already permitted by German law. He also stated:

“Shares are the next big step forward.”

Public firms can choose between traditional and electronic share issuance for their stocks. He stated that “crypto shares” can be created by registering these electronic shares either in a central register or on a blockchain. Consequently, stock shares are tokenized under the legislation. It’s unclear, though, if such shares will be available for trading on cryptocurrency platforms.

The website of the Finance Ministry states that the capital market ought to become more contemporary, global, and unbureaucratic. The website also stated that “testing of improved transferability of crypto assets” is one of the act’s crucial enhancements. It made no mention of the digital shares and securities or the ledger they would be built on, though.  

This bill carries on the nation’s tradition of developing a regulatory framework that is favorable to cryptocurrencies. As a result, Germany was named the world’s most crypto-friendly nation by CoinCub last year. The rating considered the nation’s well-defined regulatory structures and robust legal systems.

Germany’s Federal Financial Supervisory Authority (BaFin) recently granted a license to Boerse Stuttgart Digital, the second-largest stock exchange in the nation, to provide cryptocurrency custody services.

Recently, Deutsche WertpapierService Bank (Dwpbank) announced the opening of wpNex, a new platform that would allow its retail customers to trade Bitcoin (BTC) through more than 1,200 linked institutions. 

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