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Launch of electronic securities

A draft law of the federal government, scheduled to be adopted later this year, is set to allow for electronic bearer bonds. Given that those may then also be issued using blockchain and similar technologies, this could mean a breakthrough for the crypto world.

Electronic bearer bonds as first electronic securities

The progress of technological developments, particularly in distributed ledger technology (DLT), of which blockchain technology is a part, has for some time spurred demands to digitalize the financial markets. The draft law published on August 11, 2020 is now intended to appropriately modernize securities law and to strengthen Germany as a financial center.

Conventional bonds and electronic bearer bonds are to be harmonized in that physical certificates no longer need to be deposited with the central securities depository. Instead, for bearer bonds, the certificates are now to be replaced by entries in a securities register. Stocks and other securities, however, continue to remain excluded from the draft law for the time being.

Clear path for crypto bearer bonds

Issuing securities and maintaining a corresponding securities register may occur crypto-based via distributed ledger technology, e.g., in the blockchain. It would also be conceivable for issuers to maintain the register themselves once the relevant permits have been obtained. An additional central register for electronic securities is supposed to be set up, with all registers subject to BaFin supervision.

Outlook for use in practice

The law would clear the way for various electronic bearer bonds. Legally compliant transfers would be made possible by acquisition in good faith on the basis of the register entries, ultimately corresponding to classic transfers in securities trading.

It is not yet foreseeable whether the draft law will pass the legislative process without major changes. The hope remains, however, that the law will lead to a push to modernize the system by diversifying securities trading and allowing for greater efficiency through new technologies.


Johannes Schäufele

Johannes Schäufele


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