On 11 August 2020 the German Federal Ministry of Finance and the Federal Ministry of Justice and Consumer Protection have published a draft law which aims to digitalize corporate financing in the capital markets by introducing the concept of a digital bond which no longer requires the embodiment of the respective claim in a physical certificate. The draft law is not reduced to technical innovation but it applies existing German property law requirements to a digital value by defining digital bonds as goods (Sachen) under the German Civil Code. Rather than implementing a new regulatory regime for digital bonds, the draft law also confirms that digital bonds qualify as securities and generally fall within the scope of existing regulation. This briefing summarises the key measures imposed by the draft law.
Clifford Chance
