The German Bill to Permit Crypto Securities

The German Bill to Permit Crypto Securities

In terms of large countries, Germany is a fast mover in blockchain legislation
Philipp Sandner, Blockchain Expert

Labor Day Special

Since the USA are one of our biggest markets we publish some specials on federal holidays. This is one of those occasions. Despite this we stick to our publication of Video on Thursday and podcast the following night, so you all have the content on your devices the next morning.

Our Guest

Currently, there is a piece of legislation in the law-making process, to permit securities issued on the blockchain in Germany. Due to this step, we talk to Philipp Sandner (https://www.linkedin.com/in/philippsandner/), a blockchain expert, Professor of Frankfurt School of Management and Finance, Head of the Frankfurt School Blockchain Center, Member Fintech Council (FinTechRat) of the German Federal Ministry of Finance, and member of several expert groups on the blockchain.

The Bill to become Germany’s Crypto Securities Law

We are talking about a bill to revolutionize the German capital market since you could move existing securities on the blockchain, as well as emit securities completely without „paper“ on the blockchain. The new system is designed so that also startups also could run blockchains for crypto securities.

You can find the proposed bill in German here: https://www.bundesfinanzministerium.de/Content/DE/Gesetzestexte/Gesetze_Gesetzesvorhaben/Abteilungen/Abteilung_VII/19_Legislaturperiode/2020-08-11-einfuehrung-elektronische-wertpapiere/0-Gesetz.html

The US is lagging behind in terms of legislation, but they have some great startups in terms of crypto trading and crypto securities.
Philipp Sandner, Blockchain Expert

The Video interview will go live on Labor Day 2020 (September 7th) at 19.00 CET

https://youtu.be/uPaea39mDig

The Audio Interview is set to go live on the same day

Subscribe to our podcast(s) here

 

Current Situation

During our interview, Philipp refers to an already existing law in Germany, for which you can find an article here on the website of the German finance oversight body BaFin.

The small country of Liechtenstein

Liechtenstein, a country of fewer than 50.000 people (https://en.wikipedia.org/wiki/Liechtenstein), nestled in the Alps between Austria and Switzerland. The whole country of Liechtenstein is just 2.7 times larger than the Island of Manhattan (http://www.comparea.org/LIE+r2552485#:~:text=Liechtenstein%20is%202.7%20times%20larger%20than%20Manhattan%20(NYC%20borough).&text=Liechtenstein%20is%202.7%20times%20larger%20than%20Manhattan%20(NYC%20borough)). The capital Vaduz has a population of fewer than 6.000 people (https://en.wikipedia.org/wiki/Vaduz), but you should not underestimate them.

Liechtenstein is leading in Europe in Crypto-Legislation

Philipp takes a few minutes in our interview to bring the point home, but Liechtenstein and Switzerland are leading in Europe in Crypto Legislation, followed by countries from Baltic states. Not far behind in Germany with the bill we discuss. For further reference, here is the Liechtenstein Token Act: https://impuls-liechtenstein.li/en/blockchain-act-liechtenstein/

 

Future Situation

The law will likely come into force in January 2021. There are small changes to be expected, but the law should pass mostly in the current form, according to observers. This will allow for the conversion of normal securities, we assume bonds in the interview, can be converted in crypto securities early next year. Also, the issuance of crypto securities can happen early next year. We are excited about the opportunity.

 

EU Perspective

In September 2020 the European Commission is trying to catch up in digital services. There are multiple proposals and strategies on the European Level coming up. Out of those Philipp names seven landmark proposals from the European Commission this September.

There are seven landmark proposals coming from the European Commission in September 2020.
Philipp Sandner, Blockchain Expert

With the current bill, Germany may be more than three years ahead of European legislation.

Further Readings

Former appearances Summer School 2017 https://www.youtube.com/watch?v=l3plqKBpWFI

Medium Blog https://medium.com/@philippsandner

Custody of „crypto values“ aka cryptocurrencies in Germany – an English overview by the German financial services oversight body BaFin https://www.bafin.de/SharedDocs/Veroeffentlichungen/EN/Merkblatt/mb_200302_kryptoverwahrgeschaeft_en.html

 

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The Interviewer

This interview was conducted by Jörn “Joe” Menninger, startup scout, founder and host of Startuprad.io. Reach out to him:
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