the government of The Federal Republic of Germany published their Blockchain strategy. Time to take a position. A comment by Dr. Philipp Sandner of the Frankfurt School of Finance.
Prof. Dr. Philipp Sandner
19. September 2019BTC$9.853,90 -3.16%part Facebook Twitter LinkedIn xing mail
Germany on the 18. September, a national Chain, strategy-released. The document is much more than just a collection of individual measures. It is a solid strategy. Of course, more aspects could be included and desired. Nevertheless, Germany is one of the first countries in the EU, the type of this technology is the platform for a “national strategy”.
in Particular, it shows the Plan for the following types of financial-related Token can be regulated: securities, money, crypto-Assets, Stable Coins. These new rules could create legal certainty and thus a legal basis, in order to create more dynamism in the public sectors (Start-ups, investors, industrial companies, financial organisations).
Blockchain on the Agenda of the Federal government and ministries
It is great that the government of this technology attaches great importance to. Regardless of the content of the Blockchain strategy is for the development of the Blockchain Ecosystem is important that the Federal government, and several ministries put the Blockchain on your Agenda. The reason for this is that for the development of this Blockchain-strategy had to be dozens of people in the public administration the issue of multiple levels of hierarchy in various ministries across understand. Thus, the Blockchain will also come for business to the Agenda. By the way:
there Are German companies that have a strategy for artificial intelligence? Yes, some of them.Germany has a national AI strategy? Yes.Germany now has a Blockchain strategy? Yes.German companies have a Blockchain strategy? No, at least nothing that is open to the public.
in other words: The government is progressing, while hundreds of large or medium-sized “Hidden Champions” are world-class, high-quality machines, Sensors, and auto connect to mobile devices, no Blockchain on your Agenda. Of course there are some exceptions, such as Bosch, Daimler, Innogy, Commerzbank, Deutsche Börse, SAP, Deutsche Telekom, etc. These very large companies, the Blockchain technology to explore. But the lion’s share of German companies (i.e., the “Mittelstand” with its hundreds of “Hidden Champions”) does not do this yet.
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Obviously, the financial sector has a certain focus in the Blockchain strategy is quite clear tasks to be done in the coming months and years. In short, this is going to happen:
securities on the Blockchain: starting with bonds as the first Experiment for the De-materialization of securities.Euro on the Blockchain: E-Money rules are drawn up and recommended to bring the Euro on the Blockchain.”Traditional” crypto-Assets, such as Bitcoin or Ethereum, etc.: in Principle, allows for the institutional trade under a new, yet to be specified of the BaFin license.Private Stable Coins such as Libra, gold covered tokens: likely to be blocked.
to be clearer (at the expense of precision):
Securities: the green light.Euro “on-chain”: the green light.Bitcoin & co.: the green light.Private Stable Coins: red light.
Actually, it is very interesting to have “green light” for crypto-Assets, such as Bitcoin and Ethereum; and “red light” for those approaches that could develop in the daily payment traffic to an Alternative for the Euro in a private Stable Coins are such as Libra, etc.
Here are two more articles on some of these aspects.
Wide range of individual measures
The Blockchain strategy includes a number of already approved research projects, announcements for future research projects, experimental plans, and potential PoCs within the area of public administration and Roundtables on specific topics. This is quite reasonable, but a coherent framework is missing. However, the Blockchain is a cross-sectional technology. In this respect, it is useful to examine all kinds of use cases. Companies and Start-ups do nothing else.
Some interesting aspects of
It is interesting that the Blockchain strategy puts a certain focus on areas that were previously the focus of the Blockchain Ecosystem. So, for example, is mentioned in the document that Blockchain transactions should be from a legal point of view, as used. So, for example, Blockchain could be used for transactions as evidence in court, if something is proved. A clever lawyer would now say that the existing law is not sufficient, and one could argue before the court that during a process, a Blockchain transaction could be used in court.
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But to be Frank, it makes things for thousands of lawyers, hundreds of judges and dozens of dishes a lot easier if the Federal government says that Blockchain transactions are allowed to be used as evidence in court.
next, the Blockchain strategy includes plans that University degrees and certificates on the Blockchain-could systems. From the perspective of the larger cases out there that doesn’t feel like the Killer App. But, in my opinion, it is an Entry in the identity management, is targeted at the audience of young people (i.e., Digital Natives) that could actually benefit from it, to save your services and parts of your CV data, such as degrees and certificates – via the Blockchain.
Missing aspects, which clearly would be bold
A government, of course, the control several institutions and a significant part of the infrastructure of a country. Here the strategy could go further, for example, in the following areas: identity, commercial, notaries public, elections, the GmbH shares on the Blockchain. The developments at the European level will be highlighted, but the planned measures seem to be at the higher level is not well with the European Union integrated.
This point has two aspects. On the one hand, it would have been nice to have a coordinated approach to the higher level of the European Union. But on the other hand, if Europe as a Whole is not advancing quickly enough, it makes sense on a national level to progress. Also other countries and regions are in motion (China, USA, South Korea, etc.). You don’t have to wait on us. Therefore, it is appreciated, depending on the perspective that things are on the move here in Germany now. To put it differently: Germany is in Europe “the pioneer”. The front-running has – as always – positive and negative aspects. I think the fact that it is in the end positive. These missing aspects make the Blockchain strategy is not much worse. You could have added, because they will be important in the future. Let us, therefore, these missing aspects in the future Agenda for the next Version of the Blockchain strategy record.
conclusion
When we appreciate the money that is invested on behalf of the government in all these measures, it is not reasonably argue that all of the elements of the Blockchain-strategy appear to be “expensive”. Yes, for all these measures, funds will be spent, but the total investment, compared with other areas in which money currently spent is quite low.
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There are no large investments, for example, 100 million Euro to be invested in the Blockchain technology. There are no “innovation funds” for Blockchain applications. Other countries, such as South Korea, do this and invest hundreds of millions of dollars in Blockchain technologies. In other areas, such as artificial intelligence, it is Germany. So could be missing, in fact, a sort of Blockchain-Fund for Blockchain innovations.
But he is really missing? More Considerations need to be incorporated in this question, but with a number of fairly clear rules for dealing with different types of Token (Security Token, Euro-Token, crypto-Token, Stable Coins), Start-ups and companies with a legal basis on which they can act. And such clear rules are currently in development and a subset of them – in terms of crypto-Assets, such as Bitcoin and Ethereum will be effective from January 2020.
Start-ups and larger companies can now start with the investment, because the regulatory framework are becoming clear and you are not “shaky”. Maybe a good legal provisions, which come rather early than late, much better than the establishment of a “national Blockchain-Fund”? This is an open question, and thus just a thought.
Overall, I think the national Blockchain strategy is a good step for Germany and for Europe. We can always say, that aspect of X is missing, or characteristic of Y would be desired. But it is a solid strategy, and more than just a collection of individual measures. The main point of this judgment is that the most important area in the Blockchain-the area of (Finance, money, securities, cryptographic-will, Assets, etc.), are dealt with very clearly. Most likely, these rules create – and, in particular, the new rules allow financial institutions to trade crypto Assets such as Bitcoin and Ethereum and store – already now (September 2019) some dynamics among the German banks, because these rules provide a sufficiently clear (albeit not perfect) legal basis for business activities.
More:
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