Germany Passes Law to Allow Electronic Securities on Blockchain

Germany, the largest economy in Europe, has passed a law that will allow all-electronic securities to be recorded and traded based on blockchain technology. According to Reuters’ report, this is part of a more effective strategy by the country’s Finance Ministry to integrate existing ecosystems with blockchain.

The newly passed legislation does away with paper certificate requirements for selling securities within Germany’s financial markets. Stakeholders who pivoted towards this shift cited lengthy administrative processes that have often been a barrier.

While the paper certificate may have acquired sentimental value, the future belongs to an electronic version, according to Olaf Scholtz, Germany’s Minister of Finance. Scholtz said that,

“The paper certificate may be dear to some for nostalgic reasons, but the future belongs to its electronic version.”

Meanwhile, Germany is still making significant strides in the nascent crypto industry has released new guidelines that recognize crypto assets as financial instruments earlier this year. Its second-largest stock exchange, Börse Stuttgart, is also working to integrate security tokens to shift to virtual assets.

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Author: Edwin Munyui

European Countries Support EU Stablecoin Regulation

European countries are in favor of regulating fiat-backed cryptos, stablecoins.

Spain, Italy, France, Germany, and the Netherlands backed the European Commission’s goal to regulate stablecoins.

Until the regulatory, legal, and oversight challenges have been addressed, the five countries said on Friday that stablecoins should not be allowed to operate in the EU.

According to European countries, the regulatory framework of the EU for these coins should address risks to monetary policy and protect customers while maintaining their monetary sovereignty.

All stablecoins should be pegged 1:1 with fiat currency and the reserved assets denominated in the euro or any other currency of EU member states deposited in an EU-approved institution, they said.

Much like the Bank of England Governor said last week, the draft joint statement from these countries seen by Reuters, also wants the entities operating these stablecoins to be registered in the EU.

Facebook’s Libra has pushed stablecoins on policymakers’ agenda. Given that its governance body Libra Association is based in Geneva, it can impact their plans to issue its stablecoin.

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Author: AnTy

21Shares’ Short Bitcoin ETP (SBTC) Listed on German Stock Exchange, Boerse Stuttgart

On February 25, Boerse Stuttgart, the second-largest stock exchange in Germany, announced it had begun listing exchange-traded products (ETP) that are inversed with the Bitcoin’s (BTC) swings in price.

This Bitcoin ETP will be issued by 21Shares, the cryptocurrency fund manager previously known as Amun. It offers a positive return for investors whenever BTC prices fall, for a daily management fee.

Besides, it has already been listed on SIX Swiss Exchange, one of Switzerland’s most important stock markets. Through Boerse Stuttgart, which boasted €68.5 billion in trading volume in 2019, it’s expected to reach a wider base of investors.

German Investors Very Supportive of Crypto Offerings

According to The CEO, Hany Rashwan, 21Shares’ Short Bitcoin ETP (SBTC) has been developed thanks, in part, to the immense support of German investors towards crypto offerings previously.

Currently, SBTC trades in euro and is fully 1:1 hedged with the underlying asset that corresponds to it.

The ETP has also been provided with the WKN: A2781V German securities identification code. The 21Shares team has also announced its PD3 Prospectus Regulation approval by the Swedish Financial Supervisory Authority.

The company’s managing director made a statement in which he referred to this approval as a milestone for both the crypto and traditional investment communities; opening up crypto ETP products to institutional and retail clients not only from Germany but from all over Europe too.

Rashwan Aims at Offering a Regulated Asset in a Market Dominated by Unregulated Ones

Rashwan has said that while the demand for crypto derivatives growing, many of the options and futures products nowadays are built mostly in unregulated regions, causing both retail and institutional investors to be put off.

Back in 2019, when 21Shares was called Amun, it closed a partnership with Bitwise, the crypto asset manager, on a multi-crypto ETP that tracks the performance of up to 10 cryptos and their SIX Swiss Exchange listings.

In the past, Boerse Stuttgart closed a partnership with Axel Springer, the European digital publishing giant, and Finanzen.net, in order to launch a blockchain-based trading venue that rolls out a zero-fee trading app for crypto.

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Author: Oana Ularu

Germany’s Financial Authority, BaFin, Releases Guidelines For Foreign Crypto Custodians

  • Germany newly passed law set to grandfather an already operating foreign crypto firms despite lacking a license
  • However, those foreign firms that haven’t hit the German market yet are to be locked out till they apply for the licenses

Germany’s Financial Supervisory Authority (BaFin) through a memo released in January stipulated that they wouldn’t target firms holding crypto assets for German citizens and were operating without a license. To the contrary they would welcome them to the fold as similar German-based crypto custodians following a new law passed in Germany that took effect beginning of this year.

They must however have declared their willingness to get a license by March 30th and must have completed application of the same license by November 30th. This locks out those firms that hadn’t gotten into the German market yet after the law took effect as they have to acquire a license first if they are to operate there. The memo read,

“Before commencing new activity in relation to crypto values, the company must apply for a license in accordance with section 32 (1) sentences 1 and 2 KWG, also in conjunction with a legal regulation under section 24 (4) KWG”

Germany was prompted to pass the law in accordance to the EU’s Fifth Anti Money Laundering Directive (AMLD5). This meant that the crypto companies were obliged to illustrate compliance in accordance to the KYC and AML protocols.

Uncharted waters for Foreign Crypto firms

This process may baffle those who haven’t crossed paths with the German watchdog as Sven Hildebrandt, head of Distributed Ledger Consulting Group, explained. The laws passed are usually not thoroughly thought through and end with potential loopholes that can only be fixed by establishing administrative routines. He further added that with ample guidance if you had an idea of what you were doing then one ought to know how to go about the task now.

The Hildebrandt’s DLC Group which has been previously sought for advice by foreign crypto firms on how to go about the German regulations is now seeking authority from the German regulator in an attempt to become a compliance wing for companies that may lack financial muscle for the license applications.

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Author: Lujan Odera

Central Bank Chief Says Facebook’s Libra Would Have ‘Greater Potential’ in Emerging Markets

  • Germany testing a blockchain as a supplement to the previous central, account-based solution
  • Facebook’s Libra will create an exchange rate risk for the users
  • It has the potential to become a dominant player right from the start

On the backdrop of Germany’s second-largest bank, DZ-Bank’s report that says crypto usage is “just a matter of time,” cryptocurrencies made its way into 2020. As DZ analyst Sören Hettler talked about a “change in citizens’ expectations,” central banks are working on their own digital currencies.

However, Bundesbank President Jens Weidmann doesn’t believe in going with the state right away. He said:

“In a market economy, it is first up to the company to develop an appropriate offer for customer requests. Competition gives legs to market participants.”

As for the one the bank is developing, he says it is about payment transactions between the central bank and other banks.

“We are testing a blockchain as a supplement to the previous central, account-based solution,” said Weidmann. But initially blockchain, he says is “no more efficient than a central processing.”

And China might be ready to launch its central bank digital currency, but Weidmann says they have a different political system, adding that “a social market economy will ultimately find better solutions in a free society.”

Sweden is another one that has plans for e-Krona as cash gets increasingly out of use. But in Germany, as Weidmann says three-quarters of all payments are still made in cash. Even then, deposits with banks are another available option.

But he assures, “it is clear that we will provide cash as long as citizens want it to.”

Libra has the potential to become a dominant player

Tech giants have also joined in, with Facebook planning to launch its stablecoin Libra this year. However, it has raised the hackles of regulators around the world. Weidmann said,

“Facebook is planning a digital form of payment, tied to a basket of multiple currencies such as the euro and the US dollar. This creates an exchange rate risk for the users. We have stable money with the euro that has proven itself over the past decades.”

Moreover, according to him, such a currency has “greater potential” in countries such as emerging markets where their official currency is weak and the payment infrastructure is not well developed.

But the fact that the social media giant has more than two billion users, it has such a strong impact that Weidmann says, “would give Libra the potential to become a dominant player right from the start.”

However, one of the criticisms thrown at Libra is that it threatens to create a private monopoly. To prevent that, regulators want the digital currency to follow regulations that prevent money laundering and terrorist financing.

Weidmann also wants banks to counter Facebook by focusing on speed, ease of use, low costs, and security.

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Author: AnTy

Banks Awaiting Approval to Sell and Hold Cryptocurrency Next Year

  • Banks in Germany should be able to directly sell and hold cryptocurrency by January 1st , 2020.
  • Industry experts weighed in on this matter with their differing views, including Neils Nauhauser and Sven Hildebrandt.

One of the biggest issues that have faced the cryptocurrency industry has been the need for countries to amend their laws to allow the use of these assets. Now, based on new reports from The Block, banks in Germany are in the process of passing a law that would allow them to hold and sell cryptocurrency assets.

Though the amendment was passed through the German parliament last week, it will not go into effect until January 1st, changing the fourth EU Money Laundering Directive. The report states that the original version limited custody to third-party platforms, rather than the banks themselves. In the final version, the institutions have the ability to get a license that allows them to take on this role, and the deadline for the application for this crypto license has been pushed out further.

A partner with Distributed Ledger Consulting in Hamburg, Sven Hildebrandt, believes that this step in the country is another move towards Germany establishing itself as “a crypto heaven,” according to The Block. Hildebrandt added, “The German legislator is playing a pioneering role in the regulation of crypto storage,” while speaking with Handelsblatt.

Consumer protection has been a concern of some industry experts in Germany, as these laws change to accommodate cryptocurrency at local banks. Niels Nauhauser, for example, believes that consumers won’t be adequately educated on the potential risks in the cryptocurrency industry, and will overconfidently invest through their banks, costing them money.

Speaking with Handelsblatt, Nauhauser pointed out that “special bonds” have been the only way for banks to distribute. With these bonds, banks were required to provide their consumers with details about the costs and other data that allows consumers to know what they are doing with their funds. However, he added, “This is not the case in direct sales of bitcoin and co.”

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Author: Krystle M

German and South African Regulators Issue Fraud Warnings on Karatbars International

  • Financial regulators in both South Africa and Germany have issued orders against Karatbars International.

In Germany, according to a recent press release by BaFin, the Federal Financial Supervisory Authority of Germany, a cease and desist order has been issued against Karatbit. The cease and desist is to stop the company from its unauthorized electronic money business in Germany.

As for South Africa, the Financial Sector Conduct Authority issued its own press release warning the public to not deal with Karatbars International, as it is not authorized in terms of the Financial Advisory and Intermediary Services Act, to render any financial advice and intermediary services. The press release continues that the authority was informed that the company has been offering investments to customers through WhatsApp, a messaging platform.

A recent report indicates that these warnings are being issued as the company’s investors realize that they have been misled by the company. Further, the company had first offered cryptocurrency in February 2018.

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Author: Silvia A

Second-Largest Exchange in Germany Starts Bitcoin (BTC) Spot Trading

The second-largest stock exchange of Germany, Exchange Boerse Stuttgart, has recently opened up a new branch to trade digital assets, the Boerse Stuttgart Digital Exchange (BSDEX). This new platform, which will be fully regulated by the local law, will start the trading of virtual assets, starting with a single trading pair: BTC/EUR.

Initially, the launch of the exchange was prepared to be made in the first half of 2019. However, as it happened to many other companies this year, the plans were delayed in order to be fully compliant with rules and requirements.

Now, BSDEX will be open for investors. At first, only investors from Germany (both retail and institutional ones) will be able to access the platform. However, after some time, it is expected that investors from all over the EU can trade as well.

The idea is to have a digital platform that will be open 24/7 and to add more trading pairs over time. While no asset is guaranteed to be listed, Ethereum (ETH), Ripple’s XRP and Litecoin (LTC) are all expected to be listed until the end of 2020.

Dirk Sturz, the CEO of the exchange, affirmed that the market is worth billions, so the company is focused on creating a platform that will cater to the European market of cryptos. Peter Großkopf, CTO at BSDEX, affirmed that the digital platform will give the customers access to low-cost trading and will help to shape the market in the future.

This is not the first crypto project of Boerse Stuttgart. The company has already participated in an Initial Coin Offering (ICO) before.

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Author: Gabriel Machado

Liechtenstein Regulator Grants Approval To German-Startup Neufund For Token Offerings

Neufund, the Fintech startup based in Germany, starts launching public offerings onto its equity platform (which is a tokenized one) after getting clearance from an economic regulator in Liechtenstein.

On Monday (today), the startup announced the tokenized equity’s retail-grade offerings to the general public.

The CEO and co-founder of NZA (Neufund Zoe Adamovicz) affirmed that after clearance from Liechtenstein’s financial authority, the company is supplying on its pledge to equalize approach to support businesspeople all over the world, with smallest sizes of the ticket as 10 euro.

Adamovicz states that it is an excellent day for Neufund as well as for finance and business world.

It’s worth noting that the investors from the USA will need to be approved to participate. In contrast to other tokenized offerings such as an ICO (initial coin offering), Neufund’s product is designed to be a legally binding asset in the company.

The initial public retail offering being started is for a platform that’s an electric mobility one. The platform is dubbed as Greyp. As per the official confirmation from Neufund, till today, $16 million has been  processed using the platform to date.

Being among the most diligent members of the Ethereum network, Neufund is prospering the codebase from 2016. Neufund is also a partner of well-known hardware crypto wallet Ledger.

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Author: Ali Qamar

Germany’s Grand Coalition Looks To Deny All Private Stablecoins Like Facebook’s Crypto Libra

France and Germany have agreed to block Facebook’s Libra cryptocurrency. In a joint statement, the two governments confirmed that no private entity can claim monetary power, which is inherent to the sovereignty of nations.

The EU is taking a tough, regulatory-laden approach to Facebook’s Libra, and is considering coming up with a common set of rules for cryptocurrencies in general. ECB board member Benoit Coeure said that when Facebook announced Libra, it was a “wake-up call” for Europe to come up with a cryptocurrency of its own.

Thomas Heilmann of the center-right Christian Democratic Union (CDU) says:

“Up to now, the economy has done a great job in countering crises and inflation with measures taken by central banks. Once a digital currency provider dominates the market, it will be quite difficult for competitors.”

The federal government can certainly envisage a state-stable cryptocurrency. It also provides for its own state block chain and a new digital corporate form for companies: The digital corporation is to facilitate start-ups in this area.

In Switzerland, Libra is applying for a payment service license, although it could face rules that typically apply to banks, regulators in the non-EU Alpine state said on Wednesday. In China, the central bank is accelerating efforts to launch the country’s digital yuan project. This move is also part of China’s plan to block Libra.

The bitcoin price has soared so far this year, climbing some 200% as expectations around Facebook’s libra, and bitcoin and cryptocurrency interest from some of the world’s biggest technology companies have driven a fresh wave of bitcoin investment.

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Author: Sritanshu Sinha