Germany has once again proved its commitment to promoting a thriving crypto industry. This week, the German Ministry of Finance announced the ‘Future Financing Act’ that paves the way for the issuance of ‘crypto shares.’ This legislation will bring together regulations from corporation laws, capital markets, and tax laws, making it possible for public corporations to issue their stocks as conventional or electronic shares, registered on a central register or a blockchain.
According to Patrick Hansen, Circle’s Director of EU strategy and policy, “Shares are the next big step forward,” as issuing tokenized bonds and certain tokenized funds is already possible under German law. Although the Ministry did not provide details on the type of ledger the digital shares and securities will be based on, it is a significant move towards the tokenization of real-world assets.
Christian Lindner, Germany’s Minister of Finance, said, “We want Germany to be the leading location for startups and growth companies,” adding, “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.”
The Finance Ministry website also stated that the capital market should become more modern, international, and less bureaucratic. These open-minded regulations have been described as a “breath of fresh air” compared to the ongoing crackdown in the US.
In addition to the Future Financing Act, Germany’s second-largest stock exchange, Boerse Stuttgart Digital, has received a license for a crypto custody business. The firm will offer crypto trading and custody services to institutional clients and is fully regulated by the German Federal Financial Supervisory Authority (BaFin).
Dr. Matthias Voelkel, CEO of Boerse Stuttgart Group, said, “This is the first time that an established market participant has been licensed to hold cryptocurrencies in custody without any acquisitions.” The firm’s Managing Director, Dr. Oliver Vins, added, “The BaFin license reinforces us on our path to provide financial institutions across Europe with secure access to a growing market for digital assets.”
Germany’s pro-crypto approach is not new, as the country has been regarded as one of the most crypto-friendly nations in Europe. In 2019, Germany introduced new regulations that allowed banks to sell and store cryptocurrencies, making it a leading market for digital assets in the EU.
Its commitment to creating a thriving crypto industry is significant, especially as other countries continue to grapple with the legal and regulatory framework for digital assets. As more countries follow Germany’s lead, the future of finance is likely to be one where traditional assets are tokenized and traded on blockchains, increasing liquidity and making it easier for small and medium-sized companies to raise capital.