The Electronic Securities Act (eWpG) was introduced in Germany in 2021, and it has indeed revolutionized the crypto industry in Germany and potentially on a global scale if its blueprint is adopted elsewhere.
The eWpG provides a legal framework for the issuance, custody, and trading of electronic securities, including crypto-assets, within Germany. Here are some ways in which the eWpG has impacted the crypto industry:
Legal Clarity and Regulatory Certainty
The eWpG has provided legal clarity and regulatory certainty for the issuance, custody, and trading of electronic securities, plus blockchain-based assets. This is significant because prior to it, there was no clear legal framework for the issuance and trading of electronic securities in Germany. This lack of clarity has led to uncertainty and regulatory ambiguity, which hindered the development of the crypto industry.
The eWpG provides a clear legal framework for electronic securities, which is based on the existing legal framework for traditional securities. This means that electronic securities are subject to the same regulatory requirements and protections as traditional securities, which include rules regarding disclosure, transparency, and investor protection.
Reduced Costs
The eWpG has reduced the costs of issuing and trading electronic securities. This is because it has introduced a digital, blockchain-based process for the issuance and trading of electronic securities, which eliminates the need for intermediaries and brings about a reduction in costs.
In traditional securities markets, intermediaries such as brokers, custodians, and settlement agents are often involved in the issuance and trading of securities. These intermediaries charge fees for their services, which can increase the costs of issuing and trading securities.
With the eWpG, intermediaries are no longer necessary for the issuance and trading of electronic securities. It is made possible because the eWpG introduces a digital, blockchain-based process that is secure, transparent, and efficient. This process eliminates the need for intermediaries, which can significantly reduce the costs of issuing and trading electronic securities.
Increased Efficiency
The eWpG has increased the efficiency of the issuance and trading of electronic securities. This is because it has introduced a digital, blockchain-based process that is faster and more efficient than traditional paper-based processes.
The blockchain-based process introduced by the eWpG allows for the issuance and trading of electronic securities to be done in a secure, transparent, and decentralized manner. This process is faster and more efficient than traditional paper-based processes because it eliminates the need for manual processes and reduces the potential for errors.
Global Impact
The eWpG has the potential to have a global impact on the crypto industry. This is due to the fact that it provides a legal framework for the issuance and trading of electronic securities that can be used by companies around the world.
Final Thoughts
As more countries recognize the potential of the crypto industry and seek to develop their own legal frameworks for electronic securities, they may look to the eWpG as a model for their own regulations. This could lead to the development of a global legal framework for electronic securities that are based on the eWpG.
Giancarlo is an economist and researcher by profession. Prior to his addition to Blockzeit’s dynamic team, he was handling several crypto projects for both the government and private sectors as a Project Manager for a consultancy firm.
