Germany to adopt blockchain strategy

Germany announced a new strategy related to developments in the field of blockchain technology. The aim of the strategy is to use its potential for Germany’s digital transformation. The strategy states that Germany has become a dynamic ecosystem attracting developers and providers of blockchain-based services, and sees Germany as a base for the development of a ‘token-economy’. The strategy suggesting multi-stakeholder involvement of small and medium enterprises, civil society and academia.

The principles of the strategy are: to foster innovations (to strengthen the competitiveness of both Germany and the EU, create favourable circumstances to attract more investments in technology, guarantee stability of the financial sector, Strengthen sustainability (Blockchain development has to be in line with the Sustainable Development Goals and climate protection), Guarantee information security and data protection

Strategy is outlining priority measures to be introduced by the end of 2021:

– Ensuring stability and stimulate innovation in the field of blockchain in the financial sector: 

  • Regulate digital securities, regulate public purchases of crypto tokens and Initial Coin Offerings (ICO)
  • Fighting money laundering and financing of terrorism involving cryptocurrencies
  • Germany gov will work at EU and international level to ensure that ‘Stable coins’ are not an alternative to national currencies. (Stable coin is a term that is used to describe cryptocurrency backed by other sovereign currencies or commodities like dollars, or gold.) This line refers to the creation of Facebook’s cryptocurrency Libra, announced as a ‘Stable coin’ backed by a basket of other fiat currencies. 

– Fostering innovation 

  • Promote research projects including academia and civil society.
  • Blockchain technology in the energy sector to promote energy efficiency
  • Pilots a blockchain-based energy system connection to a public database  

– Enabling investment by imposing clear and reliable conditions

  • Legal conditions: Compatibility with GDPR. 
  • Analyse possible applications of blockchain technology in corporate and cooperative law by the end of 2020.
  • Standards and certification: To develop standards at the international level.
  • Smart Contracts should be understandable: Smart Contracts have great potential for automation and efficiency increase.

-Applying technology in the public sector, by creating digitized administrative services.

  • Strategy recognise potential for further development of digital identities using blockchain technology.
  • The government is piloting blockchain-based digital identities programme and evaluating suitable further applications. 
  • To participate in the design of a self-sovereign digital identity within the framework of the European Blockchain Partnership. 
  • To participate in the construction of the European Blockchain Services Infrastructure 
  • To promote lighthouse projects that use blockchain technologies as an example in the administration purposes.