Germany Legalizes Electronic Securities on the Blockchain

Angela Merkel's cabinet passed new legislation on Wednesday removing the requirement to have paper-based securities and allowing blockchain to be used instead.

By Tanzeel Akhtar

Dec 16, 2020 at 12:14 p.m. UTC

Updated Sep 14, 2021 at 10:43 a.m. UTC

GettyImages-1291558685 — German Chancellor Angela Merkel

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The German government cabinet passed new legislation on Wednesday allowing all-electronic securities to be recorded using blockchain technology.

The new law does away with the previous requirement for a paper-based certificate and comes as part of the nation's blockchain strategy blockchain, according to a Reuters report citing the German finance ministry.
Previously, issuers and securities holders had to document transactions with a paper certificate, which added administrative burdens and was seen as an obstacle for security holders, the report says.
“The paper certificate may be dear to some for nostalgic reasons, but the future belongs to its electronic version,” said German Finance Minister Olaf Scholz.
The ministry recommended last year that the country recognize and regulate blockchain-based securities as a legitimate form of financial instruments.

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