The Ministry of Finance in Germany recognizes security tokens and has called for their legitimation through firm regulations so they can be a financial instrument in the country.

The Announcement was made on Friday, which suggested that German law has recognised that these types of security are legitimate. Along with a legislation that should be brought into place in order to start supporting these changes to the global financial system.

According to the paper that was released by the ministry last week, it stated:

“The currently mandatory documentary embodiment of securities (paper form) should no longer apply without restriction.”

The German government is focused on starting with electronic bonds and will later address the applications of these digital asset shares.

The aim is mostly on securities that will be registered by a single government official agency, however, this is yet to be established. The ministry officials expects will be able to ensure no risk, tampering or manipulation, including the application of utility tokens.

In the paper the applications of tokens was suggests that:

“As a rule, utility tokens do not constitute securities, investment 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 providers have previously published an information sheet.”

A draft was presented on Security Tokens Offering (STOs), which was introduced to the German Parliament.

A member of the Christian Democratic Union (CDU), Thomas Heilmann also said that although it is an interesting technology many people do not really understand it .According to him, t his shows that there is a Fintech gap in the German ruling house.

As Germany recognizes security tokens, this could trigger other European nations to implement similar legislations .

If it passes and it becomes one of the leading ways of utilizing and issuing tokens in the financial system in Europe, it will create a precedent for the EU when it comes to regulations on security tokens.

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