The German financial regulator, BaFin, is reminding companies that wish to issue electronic securities about the registration criteria set down in the Electronic Securities Act, which went into effect in June 2021.
According to a new pamphlet published by BaFin, the deadline for licensing applications will conclude on June 10, 2022. BaFin also reaffirmed the application standards for new registrants and organizations looking to transform their current services into blockchain-based securities.
The procedure entails filing a permit application that includes all necessary information. Information on the firm’s IT security systems is one of these details. BaFin anticipates that this will be clearly stated and accompanied by a risk assessment.
The number and details of the firm’s directors and management should also be included since they will be vetted for “reliability and technical suitability.” Additionally, the application should detail the firm’s anti-money laundering and anti-terrorist funding measures.
A charge of 6,336 euros ($6,745) is also required, as is the signature of authorized company officials on the application. After receiving them, BaFin reserves the right to approve or reject the application and ask for additional information.
The Electronic Securities Act was introduced in 2020 and will take effect in 2021. The law, in particular, permits the use of blockchain technology to issue securities rather than conventional certificates.
Germany is continuing to expand the scope of its digital currency legislation
The Electronic Securities Act is only one example of German legislation that aided blockchain and digital currency growth. The European country passed a national digital currency tax regulation bill that clarified asset taxes this year.
The law exempts digital currencies kept or staked for more than a year from capital gains tax. Before the tax bill, the country has also implemented a licensing scheme for digital currency and blockchain enterprises.
The enactment of a law allowing funds to dedicate up to 20% of their portfolio to digital assets has also spurred increased institutional investment in digital assets. According to a Coincub analysis, these policies have rendered Germany the most digital currency-friendly country in Q1 2022.