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German Ministry of Finance releases "Future Financing Act" to promote the issuance of "crypto stocks"

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German Ministry of Finance releases "Future Financing Act" to promote the issuance of "crypto stocks"

The German Ministry of Finance announced the "Future Financing Act" this week to promote the modernization and internationalization of the capital market. The policy also includes the promotion of "crypto stocks," aiming to issue electronic securities using blockchain technology. Source

Introduction to Germany's "Future Financing Act"

According to an announcement from the German Ministry of Finance, the "Future Financing Act" aims to support private wealth accumulation and mobilize more private capital for future investments in climate protection and digitalization. At the same time, it aims to make it easier for startups, growth companies, and small and medium-sized enterprises to access the capital market.

"We want Germany to be a leading location for startups and growth companies. That's why we are improving opportunities to access the capital market and making equity fundraising easier. Small and medium-sized enterprises will also benefit from this," said German Finance Minister Christian Lindner.

Under the policies of the Future Financing Act, initiatives include promoting the digitalization of the capital market, issuing stocks in electronic form through blockchain or similar technologies. Additionally, improvements will be made to the transferability of crypto assets.

Circle's EU Strategic Chief Explains Crypto Stocks

Regarding Germany's plan to issue stocks through blockchain technology, Circle's EU Strategic and Policy Chief Patrick Hansen referred to it as "crypto stocks" and explained the concept.

Patrick Hansen stated that following the enactment of the Future Financing Act in Germany, companies issuing stocks can choose to issue their shares in a traditional paper certificate format or electronically.

Electronic stocks can be registered centrally or through blockchain, enabling the issuance of crypto stocks.

However, it is currently uncertain which blockchain will be used and whether it will involve the application of CBDC.

Rapid Development in Switzerland with Tokenized Stocks for Years

In addition to Germany, Switzerland, as a friendly jurisdiction for financial innovation, has seen nearly 100 Swiss companies issue tokenized stocks with the authorization of national institutions by early 2023, and they have also issued a stablecoin pegged 1:1 to the Swiss Franc.

To learn more about Switzerland's recent developments in the crypto industry, you can watch: Will Switzerland be the next crypto haven? Distributed ledger bill supports tokenized assets, Swiss Franc stablecoin.