In a statementthe digital association Bitkom described the bill for digital securities as a digitization boost in the financial sector. The hurdles for start-ups are too high so that they have difficulties in positioning themselves in the market. In the declaration of September 10th, the association listed the strengths and weaknesses of the draft law and made suggestions for improvement.
The draft law is an important step towards digitization and would also support the Federal Government’s blockchain strategy, which it published in September 2019. The aim of the program is to provide corporate finance through purely electronic securities. According to German law, certificates are still required for this.
The regulation creates legal certainty for both consumers and companies: „Digital values“ are now defined as „material“ „in German civil law. Bitkom also highlighted the technology-neutrality of the draft law, as it enables decentralized and central registers for electronic securities.
More for than against?
The requirements, especially for young and innovative companies, are still too high. Therefore, transitional regulations for such companies should be created and transferred to the draft. Bitkom also criticized the fact that crypto custodians no longer have the right to custody electronic securities under the draft law. According to the association, they should retain the right to do so – their role just needs to be clearly defined. A distinction between crypto securities registrars, custodian banks and central securities depositories is therefore necessary here. Otherwise there is a risk of legal uncertainty.
In addition, the legislative proposal by the Bitkom Ministry of Finance and Justice does not go far enough. In addition to electronic securities, the association would also like stocks and investment funds to move into the so-called Internet of Things.
Bitkom still sees room for improvement
In addition, the two ministries are only just beginning to exhaust the potential of blockchain technology. Important questions still remained open. Decentralized trading of securities is also not possible due to European regulations. Bitkom therefore encourages the government to take action in this field during its EU Council Presidency.
Bitkom was founded in 1999 and, according to its own information, today represents more than 2,700 companies in the digital economy. The draft law from August 2020 could become legally binding as early as the beginning of 2021 in order to make the German financial market more attractive and competitive.