This country seeks to create a new regulatory framework that allows the issuance of bonds through blockchain. In this way, it will compete with Switzerland
Germany seeks to take advantage of this 2019 to enter, increasingly, into the world of cryptocurrencies and leave behind its conservative tendency in terms of using that financial technology.
The authorities of this country are planning to submit a draft regulation that will allow the issuance of blockchain bonds as soon as possible this summer, according to what local media reported, such as the Handelsblatt business information newspaper.
Thomas Heilmann, the ruling coalition government’s dedicated blockchain correspondent, commented that the new legislation has advanced, through a synthesis document that already exists. The official considers it something necessary and advantageous for his country to adopt blockchain technology, though a clear regulation project.
“We believe it is very important that we bring blockchain technology to Germany, specifically in 2019”, said Heilmann, who added that the new legislation has the support of representatives of the technological world.
According to the German authorities who defend this project, the initiative would allow the bonds currently issued on paper to be issued as virtual tokens without any problem. Among other characteristics, the notarial system could also be included in the agreement.
Increasing Interests
Heilmann indicated how the process would work. In this point, he commented that if a real estate entrepreneur builds a house and seeks investors who receive tokens in return, bond buyers will have access to digital rights that, in the future, would become annual interest payments.
In case the issuer does not fulfill its payment obligations, the buyers will be able to transfer their tokens to a notary public and get the creditors to take the bank account of the real estate entrepreneur.
Frank Schaeffler is one of the blockchain experts for the Germany’s Free Democratic Party. He believes that, with this new regulation proposal, the Government has finally awakened.
“Things need to move fast. Crypto issuers and investors are looking for a regulated financial marketplace for their activities which we can present on the international stage. Germany has the chance to adopt a key position here”, he said.
Current legal adjustments in Germany seek to “tokenize” many of the processes that are performed on paper, whilst improving the legalization of blockchain tokens would avoid legal gaps. In this way, it will be known how to act to face the problems that may arise around the use of these assets digital.
From the beginning, Germany showed a conservative stance both in the use of blockchain technology and in the exchange of cryptocurrencies. Bitcoins (BTC) and different tokens were treated with caution in the country.
That situation began to change especially since 2018, when the country’s authorities began to discuss a regulatory framework and accepted the cryptoactive as a form of legal payment.
A Step Closer
Germany seems to follow the steps of Liechtenstein which, like Switzerland, has shown that it opens its doors to the blockchain world. Recently, Liechtenstein launched blockchain bonds for the real estate sector and approved a new regulation for blockchain tokenization.
At the end of 2018, members of the board of the German Central Bank, such as Joachim Wuermeling, thought that regulatory measures should have a global character to be successful.
“Virtual currencies effective regulation could only be achieved through the greatest possible international cooperation, because the regulatory power of the states is obviously limited”, he said.
According to the workers of the Bundesbank, the laws regarding the use of cryptocurrencies must take into account that blockchain environments have no borders, so that measures cannot be applied as a national or regional standard.
This assessment goes against regulations made by countries such as Japan, China and The United States. Those regions seek to avoid money laundering, user scams or investment losses.
By María Rodríguez
