Germany passed a new law today to allow all-electronic securities transactions to be recorded using blockchain technology. The country plans to become a blockchain nation with the potential implementation of the mentioned technology in different parts of the financial sector.
According to a report by Reuters, Angela Merkel’s cabinet passed the new legislation on Wednesday to exclude the need for securities transaction reporting through a paper certificate. The old structure of using paper certificates will now be replaced by a blockchain entry in a central securities depository.
The German Finance Minister, Olaf Scholz, who has previously criticized private cryptocurrencies and digital assets, supported the recent initiative by the Government and outlined the potential benefits of blockchain technology.
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“The paper certificate may be dear to some for nostalgic reasons, but the future belongs to its electronic version. Electronic securities cut costs and administrative burdens. The recent initiative is a part of Germany’s wider blockchain strategy,” Scholz added.
European countries have made substantial progress in terms of the implementation of blockchain technology in different sectors including the financial sector. The ECB President, Christine Lagarde announced the recent developments on a central bank digital currency (digital euro) and mentioned that the ECB will launch digital euro in the next two to four years. Germany’s neighboring country Switzerland has started working on the mass implementation of project Helvetia, to enable integration between tokenized digital assets and central bank money. Germany plans to introduce a clear framework for the implementation of blockchain technology across different sectors. Germany’s Justice Minister, Christine Lambrecht mentioned that the law would provide legal clarity and increase the potential of new technologies like blockchain.
Germany’s private banks remained active in recent months as far as implementation of blockchain technology and introduction of crypto services are concerned. One of the oldest banks in Germany, Hauck & Aufhäuser announced earlier this month that the bank is planning to launch a cryptocurrency investment fund in January 2021 to invest in Bitcoin and other digital assets.