Crypto shares will enable German companies to tokenize shares

Germany has often been seen as one of the most crypto-friendly nations in Europe. It has reinforced this notion with its latest regulatory approval to digitize stocks as “cryptoshares.”

This week, the German Ministry of Finance announced the “Future Financing Act”. The new legislation will pave the way for a regulatory basis for issuing “cryptoshares.”

Furthermore, the act aims to bring together regulations from company laws, capital markets and tax laws.

Finance Minister Christian Lindner said: “We want Germany to be the leading place for startups and growth companies.” He added:

“This is the reason why we are improving access to the capital market and facilitating the acquisition of equity capital. Small and medium-sized businesses will also benefit from this.”

On April 5, Circle’s director of EU strategy and policy, Patrick Hansen, explained the concept of crypto shares.

What are crypto stocks?

Public companies will have the choice of issuing their shares as conventional or electronic shares. These electronic shares can be registered either in a central registry or on a blockchain, giving rise to “cryptoshares”, he added.

According to the Ministry of Finance’s website, the capital market should become more modern, international and less bureaucratic.

However, it did not go into details about the digital stocks and securities or what ledger they would be based on.

Commentators said Germany’s open-minded regulations were a “breath of fresh air” compared to the enforcement and ongoing crackdown in the US

Hansen said that the issuance of tokenized bonds and certain tokenized funds is already possible under German law. “Equity is the next big step forward,” he added.

While this does not directly concern crypto markets, it is a step forward in the tokenization of real-world assets.

Last year, BeInCrypto reported that Germany had passed Singapore as the world’s most crypto-friendly country.

German exchange offers crypto custody

Earlier this week, it was reported that Germany’s second largest stock exchange had received a license for a crypto custody business.

Boerse Stuttgart Digital will offer crypto trading and custody services to its institutional clients.

CEO of the Boerse Stuttgart Group, Dr. Matthias Voelkel, commented:

“This is the first time an established market participant has been licensed to hold cryptocurrencies in custody without any acquisitions.”

Furthermore, the firm is fully regulated by the German Federal Financial Supervisory Authority (BaFin).

“The BaFin license strengthens us on our way to provide financial institutions across Europe with secure access to a growing market for digital assets,” said CEO of Boerse Stuttgart Digital Dr. Oliver Vins.