German regulators intend to introduce blockchain to the securities market by replacing paper stocks and bonds with digital versions.

The relevant bill was presented by the German Federal Ministry of Finance and the Federal Ministry of Justice and Consumer Protection. The statement emphasizes that the adoption and implementation of tokenized securities is one of the key aspects of the government’s blockchain strategy.

Regulators expect the move from paper to digital will not only improve the liquidity of securities but also provide better legal compliance.

The bill clarifies the regulation of such instruments. The issuance and circulation of tokenized securities will be controlled by the German Federal Financial Supervision Authority (BaFin). The agency will also take over the management of decentralized accounting instruments.