German Authorities Looking to Regulate ICOs
Germany’s Federal Ministry of Finance and Federal Ministry of Justice and Consumer Protection have published a paper that focuses on electronic securities and the regulation of specific cryptocurrencies to reposition Germany in the fintech industry.
Per the report, the Federal Ministry of Finance and Federal Ministry of Justice and Consumer Protection’s have published a paper which addresses electronic securities and the regulation of initial coin offerings (ICO).
Reference was made to a March 12, 2018, coalition agreement which looked to strengthen the country to become a leading financial technology and digitization hub, while also developing a robust blockchain strategy.
In the area of electronic securities, it was outlined that the current German regulations governing securities should be applicable with restrictions. Likewise, it has been proposed that the issuing of these securities should be technology-neutral and as such, they can be offered using the distributed ledger technology (DLT).
When it comes to the area of regulating the ICOs, it was noted that in the past, cryptocurrencies have been offered without being classified as investments, securities, or other financial instruments under the Securities Trading Act.
Capital Market Laws
The issuance of these cryptoassets will not be subject to the existing regulations of the capital market, and it goes contrary to the issuance of electronic bonds which may still be subject to the law.
Thus, the paper seeks to discuss the best ways to regulate ICOs to promote consumer protection.
That being the case, the Federal Ministry of Finance and the Federal Ministry of Justice and Consumer Protection intend to get a comprehensive understanding of the measures outlined in the paper which will lead to the drafting of a bill.
Earlier in February 2019, the German government consulted with experts in the blockchain community in a bid to understand the potentials of DLT before its strategy presentation in the summer of 2019.
BTCManager on October 22, 2018, also reported that Germany’s legislators are trying to set up a legal framework that will govern blockchain technology and cryptocurrencies.