“The paper certificate may be dear to some for nostalgic reasons, but the future belongs to its electronic version,” Finance Minister Olaf Scholz said, adding that electronic securities cut costs and administrative burdens.
The paper certificate can now be replaced with an entry in a central securities depository or a register kept by private-sector banks. An entry in a crypto securities register based on blockchain technology is also possible.
Justice Minister Christine Lambrecht said the law would provide legal clarity and enhance the potential of the new technologies.
The technology is considered to be forgery-proof. As every user manages a copy of the database, it is theoretically impossible to manipulate it unnoticed.
“Blockchain technology has the potential to turn current procedures completely upside down and to fundamentally change the way entire business sectors work,” Achim Berg, head of the IT business association Bitkom said.
(Reporting by Michael Nienaber and Christian Kraemer; editing by Thomas Escritt)