The German Ministry of Finance has begun collecting comments on the draft resolution on the possibility of tokenizing mutual fund shares.
According to a document published by the German Federal Ministry of Finance, the regulator has begun public consultations on approving the tokenization of shares in mutual funds. Comments are accepted until October 1, 2021.
The draft resolution, if adopted, will allow open-ended investment funds to issue tokenized units using the blockchain. The authors of the project warn that the German financial industry may be at a disadvantage in the absence of appropriate regulation when other European jurisdictions turn to tokenization.
The token will represent a certain number of shares of the regulated fund. According to the authors of the proposal, tokenization offers many benefits, such as lowering the barrier to entry into the fund and reducing the administrative costs associated with new investors.
This initiative shows that blockchain and cryptocurrencies are attracting more and more attention from legislators in one of the richest countries in the European Union. Recently, a new Fund Placement Act (Fondsstandortgesetz) came into force in Germany, allowing special funds to invest up to 20% of their money in bitcoin and ether. There are more than 4,000 such funds. According to experts, this law will bring the German digital asset market up to $ 657 billion.
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