The new legislation introduced in August comes as Chancellor Angela Merkel’s cabinet loosens restrictions on mandatory paper certificates for securities.
The German government has passed a new law to allow digital securities as part of the nation’s blockchain plans aimed at reducing costs and administrative burdens, its finance minister said on Wednesday.
“The paper certificate may be dear to some for nostalgic reasons, but the future belongs to its electronic version,” German finance minister Olaf Scholz said in a statement as quoted by Reuters.
Entries in a central securities depository or registers held by private-sector banks would replace the paper certificates, the report read, adding institutions could potentially build entries in crypto securities registries via blockchain technologies.
The law could also boost legal clarity as well as potential for the emerging technology, German justice minister Christine Lambrecht said.
The news comes after the German Federal Ministry of Finance (BMF) and Federal Ministry of Justice and Consumer Protection (BMJV) introduced the bill in August as part of the country’s core blockchain strategy.
Global Governments, Companies Raise the Bar in Blockchain
The news comes as numerous multinational firms and governments are racing to implement the emerging technology into digital ecosystems, with several sustainable fast moving consumer goods (FMCG) and luxury fashion firms using blockchain to monitor raw materials in supply chains, it was revealed at a Reuters sustainability event in November.
Government officials in Shenzhen’s Luohu district trialled a blockchain programme in October to promote the nation’s cryptocurrency, which distributed 50,000 “red packets” of the state blockchain-based currency to residents in the region.
According to Cointelegraph, several institutions have implemented blockchain, including a US-based firm which launched an Ethereum-based trading platform in July for a fund managing shares of US Treasury securities. Tokai Tokyo Financial Holdings also announced plans for a digital security exchange in Japan.
Abishur Prakesh, the world’s leading authority on tech geopolitics, explained how governments and institutions were competing for centralised and decentralised blockchain platforms in an interview with Sputnik.