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  • Chinas Blockchain-Based Renminbi as the First National Cryptocurrency
    Last week, China surprised the rest of the world with the issuance of a digital Renminbi. By doing so, the Chinese government became the first mover on the road to a digital central bank currency (CBDC) in form of blockchain-based units of national currency. Even though the project right now is limited to parts of […]
  • Tokenized Convertible Bonds – A Compromise on the Road to Equity Tokens?
    The interest in token-based capital markets issuances increases notably. Not only blockchain startups and tech companies, but also well-established businesses with more traditional business models increasingly consider this new and innovative means of refinancing through the tokenized capital markets. So far, German businesses limit themselves to the issuance of tokenized, subordinated participation rights, but it […]
  • The Authorization Process for Crypto Custodians – The New BaFin Guidelines
    Companies that offer their customers the storage of crypto assets and/or private keys that are used for the transfer of crypto assets had to notify BaFin of their intention to apply for authorization as a crypto custodian until the 31st of March 2020. Companies that used this option are now obliged to submit a complete […]
  • Digitalization and COVID-19 – Temporary Simplifications for German Stock Companies
    Digitalization was on the rise even prior to the SARS-CoV-2 outbreak but the German legislator so far struggled to introduce the legal framework that was necessary to foster the further development of digitalization. With the outbreak of COVID-19 into a world-wide respiratory pandemic and the subsequent pressure on the German economy, the German legislator thankfully […]
  • Business Models with Crypto Assets – What is the Correct Legal Basis for the BaFin Application?
    In Germany, business models that are based on cryptocurrencies require prior approval by BaFin if their activity qualifies as a banking business or a financial service. This was already the case prior to the introduction of crypto assets as financial instruments into the German Banking Act (KWG) at the beginning of this year. BaFin qualifies […]
  • Blockchain-based Digital Collectibles – Are Those Financial Instruments?
    More and more mid-sized companies consider blockchain-based capital markets issuances – so-called security token offerings (STO) – as an alternative. The new issuing-vehicle is quickly becoming a viable financing alternative not only for startups but also for SMEs. But blockchain has even more to offer. Stocks, bonds and shares of investment funds are not the […]
  • The New BaFin Leaflet for Crypto Custodians – Can Security Tokens be Stored by Crypto Custodians?
    BaFin published its long-awaited leaflet on crypto custodian services (German only) at the start of last week. Since the legislative process took almost till the end of 2019 and the crypto custodian service was however introduced on the 1st of January 2020 into the German Banking Act (KWG), BaFin had little time to develop an administrative practice […]
  • Tokenization of the Capital Markets – Which Financial Instruments Can be Tokenized?
    Blockchain-based capital markets issuances are more and more becoming a viable alternative not only for blockchain startups but also for mid-sized companies when it comes to procuring funds at the capital markets. After the first security token offerings have already been realized by startups in very important pioneer work and the international capital markets supervisory […]
  • Tokenized Financial Products and Deposit Business – Can Tokenization Exclude the Deposit Business?
    Companies that collect money from third parties which, according to the base agreement, shall be subject to an unconditional repayment clause, in most cases operates a depository business and therefore requires a banking license. The depository business is an activity that can legally only be provided by licensed banks. There are some exemptions from the […]
  • Tokenized Asset Investments – What are the Advantages to Tokenized Securities?
    Businesses that intend to procure funds in Germany have three basic regulatory frameworks regarding the legal design of the investment product they want to offer. This is applicable to traditional capital markets issuances as well as for the issuance of innovative tokenized financial products. Blockchain-based capital markets issuances nowadays are immediately associated with the public […]
  • Let´s Build a Crypto Custodian (Part V) – Reporting Obligations of Crypto Custodians in Ongoing Supervision
    ng Act (KWG) as well as the requirements of the legislative decrees that are based on the KWG, just like any other supervised bank or financial institution. One of the essential obligations of supervised institutes in the ongoing supervision is the reporting obligation to BaFin and the German Central Bank. The scope of the reporting […]
  • Blockchain-Based Central Bank Money – Which Effects Would that have?
    Since last autumn and the announced massive resistance of international politics against Facebook´s Libra coin it has been relatively quite regarding the idea of stable coins that are issued by private companies. Nevertheless, the advance of the social media giant has been a true wake-up call for legislators and central banks of the major economies […]
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