the the Ministry of Finance has submitted jointly with the Federal Ministry of justice and consumer protection, a key issues paper. It includes concrete suggestions for dealing with the Blockchain, Bitcoin & co. The initiators are calling it the launch of digital securities, a Central securities register. What is considered to be a consumer protection measure, may, in addition to increased legal certainty for investors, but also to negative consequences for the independence of the German crypto-Ecosystem.
Polina Khubbeeva
12. March 2019BTC$3.893,90 0.53%part Facebook Twitter LinkedIn xing mail
enable Under the Heading “Digital innovations – the protection of investors” to ensure the Federal ministries for Finance and justice, on the 7th of March, a 7-page position paper on the regulation of crypto currencies and Blockchain released. This was done as a first measure, in the framework of the until the middle of 2019, as announced Blockchain-strategy of the Federal government and in the coalition agreement set out aims to create a legal framework for the crypto-Economy.
Electronic securities on a Blockchain-a base register entry, including the
First of all, should be legalized according to the document’s electronic securities. The previous regime undergoes mandatory “deed of embodiment” (paper form) of securities of loosening.
the Opening of The German Law successes “technology neutral”, there are preferably neither Blockchain nor the previous analog System of the securities Depository. The legal Changes are yet to be implemented before a full legal name of EU harmonisation in the Bitcoin and crypto-area, in order to secure the attractiveness of the German financial site.
national Online Register for digital securities
The electronic securities are to be entered in a national Online Register, which is designed primarily for the protection of property. It will serve as an electronic counterpart of a deed and recorded in a transparent and visible to everyone the author, as well as other information about the debenture. Specific rules, such as whether the operator of a Blockchain already as a CSD, or only as an infrastructure provider, can be treated, it is necessary to establish, in consultation with the EU law.
Other proposals in the paper in relation to electronic securities mainly serve the protection of investors and see, e.g., the prohibition or restriction of the rights of Blockchain-bonds for private investors.
regulatory options for Bitcoin and tokens, there are no proposals to ICO and money laundering
The paper also briefly the legal treatment of Utility tokens and other crypto-currencies such as Bitcoin. Special attention is spent here on the minimization of the increased investment risks in crypto-currencies, arising from inadequate information for investors. Up to the creation of a broader EU regulation, the possibility, the obligation for publication of an “information sheet”. This must contain certain information before it can be approved by the Ministry of Finance.
A German exceptionalism in the case of the ICO-regulation is not provided. Also on the topic of money laundering in the crypto area is not a part of the position paper, rather, it brackets the initiators with reference to the money laundering Directive. Other measures, as well as the evaluation of the feedback to the white paper would follow in a speaker design.
The downside of government crypto-regulation
in Particular, the restriction of private investment in Blockchain-backed securities, raise new questions about the consequences of the German regulatory design. The paper acknowledges the legal challenges of regulating transnational financial transactions:
In terms of private international law, as in the case of electronic securities, a determination of the applicable Law is eliminated according to the geographical Location of the matter/the value of the paper certificate, and the Register is to be locate in an electronic register also difficult to the law of the state under whose authority the securities register.
While in regard to supranational EU law and the international character of the Blockchain and crypto the implementation of the vertices is not guaranteed, it remains to be seen how the Federal government in the next few months, investors ‘ protection and investors the independence to ensure.
Up to 12. April have associations, and interested professionals the opportunity to purchase at [email protected] or [email protected] position to the key issues paper.
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