First Milestones and Signal Effects in the Crypto-Scene

JP Morgan, whose CEO was one of the most vocal critics of Crypto-Assets two years ago (“fraud”), recently introduced its own stable coin. The German Regulatory Authority BaFin, known to be one of the strictest financial authorities in the world, has approved the first so called security token offering (“STO”) of the Berlin-based srypto start-up Bitbond. Well-established market participants such as Landesbank Baden-Württemberg or Commerzbank report significant progress in their efforts to adapt the blockchain technology to securities and currencies. And this list could be continued indefinitely.  

At the end, it is all about the „tokenization of assets”, i.e. the transfer of ownership and participation rights via the Internet in digital form, whereby these contracts (“token”) are saved in decentralized and encrypted databases (“blockchains”).  

Legislators in Luxembourg and Liechtenstein drive initiatives to create pan-European legal ceartinty for STOs. And even the German legislative body intends to make Germany the number one showcase for decentralized database technologies, which are the backbone of crypto assets such as Bitcoin. 

For, in addition to coping with the technological challenges (e.g. secure custody, client identity, speed, energy efficiency), legal stability and clarity, such as token classification, data protection, copyrights, instrument documentation, taxation…etc are decisive. 

And even if this represents only the tentative start of a new megatrend, which will most likely reverse industries and create numerous new business models, one thing becomes clear: Crypto is far from being dead, but lively and quickly progresses in new and different varieties.