Germany plans to issue electronic shares on blockchain, boost startups

by · April 7, 2023

The German government is pushing for more welcoming regulations for startups working on financial innovation in the country, according to the recently drafted legislation of the “Future Finance Act” introduced by the Ministry of Finance on April 5.

The main goals of the legislation include the digitization of capital markets through the issuance of electronic securities on a blockchain and improved portability of crypto-assets. According to a translated version of the bill, Germany’s “capital market should become more modern and efficient in order to mobilize more private capital for future investments.”

Among the government’s goals is to create a favorable environment for startups and investors in the country. The legislation reduces the minimum market capitalization for IPOs from 1.25 million euros ($1.37 million) to 1 million euros ($1.1 million) and facilitates investment by institutional players in start-ups, small businesses and special purpose acquisition companies (SPACs ).

According to local media, the new rules will apply to companies employing up to 500 people and with revenues below 100 million euros ($109 million).

“We want to make Germany the leading place for startups and growth companies,” German Finance Minister Christian Lindner said in a statement. “That is why we are improving access to the capital market and making it easier to raise equity capital. Small and medium-sized large companies will also benefit from this.”

The government claims the move will make Germany more attractive to investors and promote a culture of stock market investment. – Startups, growth companies and small and medium-sized companies should have easier access to the capital market, said the minister.

Germany is a member of the G7, a group of the world’s seven largest democracies. Together, G7 members are working on tougher crypto regulations, which many in the industry believe could hinder innovation and growth. The G7’s new agenda is expected to be announced at the next meeting in Hiroshima, Japan, which is scheduled for May.

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