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Germany to Approve ‘Crypto Shares’ Issuance Regulations

2 mins
Updated by Kyle Baird
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In Brief

  • The new act aims to attract startups to Germany.
  • It will enable firms to tokenize their stocks.
  • German bourse receives crypto custody license.
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Germany has often been regarded as one of the most crypto-friendly nations in Europe. It has reinforced that notion with its latest regulatory approval to digitize stocks as ‘crypto shares.’

This week, the German Ministry of Finance announced the ‘Future Financing Act.’ The new legislation will pave the way for a regulatory basis to issue ‘crypto shares.’

Furthermore, the act aims to bring together regulations from corporation laws, capital markets, and tax laws.

Minister of Finance Christian Lindner said, “We want Germany to be the leading location for startups and growth companies.” He added:

“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.”

On April 5, Circle’s Director of EU strategy and policy, Patrick Hansen, explained the concept of crypto shares.

What are Crypto Shares?

Public corporations will have the choice of issuing their stocks as conventional or electronic shares. These electronic shares can be registered either in a central register or on a blockchain, giving rise to ‘crypto shares,’ he added.

According to the Finance Ministry website, the capital market should become more modern, international, and less bureaucratic.

However, it did not go into details regarding the digital shares and securities or what ledger they would be based on.  

Commenters said that Germany’s open-minded regulations were a “breath of fresh air” compared to the enforcement and ongoing crackdown in the U.S.

Hansen said that issuing tokenized bonds and certain tokenized funds is already possible under German law. “Shares are the next big step forward,” he added.

While this does not directly concern crypto markets, it is a step forward in the tokenization of real-world assets.

Last year, BeInCrypto reported that Germany had surpassed Singapore as the world’s most crypto-friendly country.

German Bourse to Offer Crypto Custody

Earlier this week, it was reported that Germany’s second-largest stock exchange had received a license for a crypto custody business.

Boerse Stuttgart Digital will offer crypto trading and custody services to its institutional clients.

CEO of Boerse Stuttgart Group, Dr. Matthias Voelkel, commented:

“This is the first time that an established market participant has been licensed to hold cryptocurrencies in custody without any acquisitions.”

Furthermore, the firm is fully regulated by the German Federal Financial Supervisory Authority (BaFin).

“The BaFin license reinforces us on our path to provide financial institutions across Europe with secure access to a growing market for digital assets,” said Managing Director of Boerse Stuttgart Digital Dr. Oliver Vins.

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Martin Young
Martin Young is a seasoned cryptocurrency journalist and editor with over 7 years of experience covering the latest news and trends in the digital asset space. He is passionate about making complex blockchain, fintech, and macroeconomics concepts understandable for mainstream audiences.   Martin has been featured in top finance, technology, and crypto publications including BeInCrypto, CoinTelegraph, NewsBTC, FX Empire, and Asia Times. His articles provide an in-depth analysis of...