Daily Archives: March 9, 2019

Germany’s Stance on Security Tokens Could Be a Green Light for Europe

In a surprise move, the German Ministry of Finance has called for recognition of blockchain-based securities as a legitimate form of financial instrument.

Friday’s announcement suggested that German law needed to recognize these types of securities, and legislation should be brought into place to support the changes. The new paper published by the ministry last week stated that “the currently mandatory documentary embodiment of securities (paper form) should no longer apply without restriction.”

The German government wants to start with electronic bonds and then later address digital shares. Such securities would in future be registered by a single government agency as yet to be established. This, in the view of the ministry, would ensure no risk of tampering or manipulation. In terms of utility tokens, the paper outlined:

“As a rule, utility tokens do not constitute securities, investments or other financial instruments under the German Securities Trading Act and in most cases will not be electronic bonds in the future,” although “it could be determined by law that a public offer of utility tokens may only take place if the provider has previously published an information sheet.”

There is also a draft bill on Security Token Offerings (STOs) passing through the German Parliament, although in the opinion of Christian Democratic Union (CDU) member Senator Thomas Heilmann, who maintains that although it is an interesting technology “many people don’t understand it,” showing there is still a fintech gap in Germany’s ruling house.

The feeling is that Germany could steal a march on other European nations with this legislation, if passed and become the leader in tokenized finance in Europe, further creating a precedent for EU-wide regulations on security tokens moving forward.

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The Year of Blockchain Is Here Claims Capitol Hill Top Gun

Congressional Blockchain Caucus chairman on Capitol Hill, Tom Emmer is making waves again, this time predicting that 2019 will be blockchain’s year.

He was addressing an audience on the initial day of this year’s Washington DC Blockchain Summit. Emmer has become the main voice in Washington’s political circles when it comes to criticizing the heavy-handedness of SEC regulators regarding all things cryptocurrency. Emmer commented that this year:”…stands to be the year of blockchain, the year we separate hype from reality, and begin harnessing blockchain in the right-use cases to lower costs and increase efficiency,”

Notably, Emmer introduced the Blockchain Regulatory Certainty Act bill (H.R.528 ) in January, which if it goes through will save blockchain developers from money transmitter registrations in US states. Another recent Emmer bill would provide tax relief for forked asset holders and a non-binding resolution backing blockchain and cryptocurrencies.

Emmer was stating his point for clear cryptocurrency and blockchain regulations, not for the first time, and warned delegates of the threat of what he called “a patchwork of regulations” by the government. He argued that with this approach:“…the industry will suffer, and prove government to be ineffective. This confusion will undoubtedly lead to more regulation, which will only stifle innovation and potential application of the technology.”

Commenting on the money transmitter laws which his bill was introduced to challenge back in January, he suggested that the laws were originally enacted for a completely different purpose and don’t relate to blockchain, arguing, “If no funds are being entrusted to another, it should be certain that these regulations do not apply.”

He ended his comments on a topical, if not well-worn note; concerns of the government that Bitcoin was still being used for illegal activity. Emmer warned:

“Many, including those in this town, would like to focus only on blockchain and ignore or criticize cryptocurrency,” he said. “They will tell us the bitcoin is used by criminals, and the blockchain is the real innovation. It’s true there are illicit transactions. But that should not be reason to totally dismiss cryptocurrency.”

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