The German government recently released a blockchain strategy. This new strategy shows that the nation recognizes the potential blockchain technology holds. However, the strategy by Germany opposes stablecoins in any form.
What it addresses
The strategy establishes a framework through which the German government will fund blockchain projects, the sustainability of the sector and much more. This document’s opposition to stablecoins is one of the most solid policy indications that Germany intends to ban Facebook Libra in the nation.
Instead, the government wants to focus on stabilizing the sector, encouraging innovation, spreading knowledge about the sector, as well as protecting user data. It is quite clear that Germany has the ambitious goal of becoming a leader in the blockchain industry.
Possible Blockchain Use Cases
Based on the outline, the energy sector appears to be an area Germany believes they can monetize through blockchain technologies. It mentions that there is already an ongoing pilot project to test the feasibility of using the technology in this sector. In short, energy transactions in the country could one day take place on a public blockchain.
According to the document, using the blockchain could lead to better energy efficiency. It proposes using the technology to digitize section of the greed, thus making the transition towards renewable energy sources much easier. The writings also propose using blockchain to facilitate transparent and privacy of user data.
Germany’s blockchain strategy proposes using the blockchain in the education sector. In this context, the technology will be used to verify educational achievements. In addition, the nation is currently piloting a national digital identity system.
Germany could officially recognize digital securities. This would be done by applying blockchain to the financial sector. Ownership of various securities would be recorded through distributed ledgers to enhance transparency. This would make it possible for electronic value papers to be issued using blockchain. Finally, the government hopes to create laws that will regulate non-security tokens and crypto exchanges with the focus being on consumer protection.
Opposition to Stablecoins
The strategy states that Germany will seek to work with international partners to prevent stablecoins issued by private entities from disrupting the monetary systems of sovereign nations. This strategy came out shortly after the EU published a report titled ‘Blockchain Now and Tomorrow.’ The EU report revealed that policymakers were already working on various applications for blockchain technology. However, Germany’s document is more detailed and reveals solid use cases that might be implemented in the next two years.
Limited investment in the Sector
While Germany has laid out a clear plan on how it will handle the crypto and blockchain strategy, it does not appear that the nation intends to invest much money in the sector. This is especially so compared to nations such as South Korea, which are investing hundreds of millions of dollars in the technology.
The planned regulatory clarity will no doubt encourage both large and small companies in Germany to invest in the crypto sector. In short, this strategy is a good starting point for Germany and the EU. Despite the rejection for stablecoins, Germany is clearly paving a path for the future of money through Blockchain and distributed ledger technologies.
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