German Ministry Wants Blockchain Security Market Under Regulation
The German Ministry of Finance has suggested that all the blockchain powered securities in the country would be treated as legitimate and as a form of financial instrument and regulate them accordingly.
The ministry issued a paper on Friday saying that securities need not have to be documented on paper; it can be published in electronic form. The department said that at present the laws are more paper oriented, but this should not be the case anymore; the law should be more open to electronic securities.
The paper further said that the country law should build a legal infrastructure or system for regulating these digital instruments. The system should be flexible, adaptable, must be compatible with the rules and change the necessary components of the blockchain platform.
The ministry suggested that the process can start with electronic bonds, and gradually ministry would pay attention to digital shares. The department said that the electronic shares demand more regulatory attention and hence making it a priority would delay the process.
These securities are supposed to get registered at that single central registry only, which is governed by a government-supervised body. This is recommended to get done in order to avoid the element of manipulation in the system or the transactions.
The paper issued by the ministry says that it would be better to have a separate set of regulations for the acquisition and transfer of electronic securities. In case the person wants to use these digital securities to trade on the country’s trading facility, they should be registered with the central security depository (CSD).
The ministry put its view saying that the retail investors should be allowed to purchase tokenized securities only with the help of an official financial facility. The blockchain technology should not be given any special privilege, especially when it comes to the indigenous development of public blockchain technology.
The paper also talked about utility tokens, and their exemption from the rules and regulations implemented on securities issuers. All these recommendations given by the ministry came as a draft bill on STOs. The bill has been pondered over by German lawmakers behind closed doors.
Being a financial hub of European region, Germany holds a key position in tokenized finance.
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March 10, 2019 at 11:26AM