Germany accelerates full digital securities strategy with Blockchain
Angela Merkel’s Cabinet on Wednesday passed a new law to introduce all electronic securities as part of its broader blockchain strategy, Germany’s finance ministry said.
The law aims to ease rules that have so far forced issuers and holders of securities to document transactions with paper certificates. “The paper certificate may be valuable to some for nostalgic reasons; but the future belongs to the electronic version,” Finance Minister Olaf Scholz said, adding that electronic securities reduce costs and administrative burdens.
The paper certificate can now be replaced by an entry in a Central Securities Depository or by a register held by private sector banks, Reuters reported. It is also possible to log into a crypto securities ledger based on Blockchain technology.
Justice Minister Christine Lambrecht said the law would provide legal clarity and increase the potential of new technologies.
Blockchain technology is a kind of digital ledger in which all data in a transaction is stored in encrypted form. It is open to all users, providing a high degree of transparency. According to the news source, the blockchain is thought to be anti-counterfeiting. Because each user manages a copy of the database, it is theoretically impossible to change it unnoticed.
“Blockchain technology has the potential to completely subvert existing procedures and fundamentally change the way all sectors work,” said Achim Berg, president of the Bitkom IT Business Association.