Germany eWpG: Electronic Securities Act and Crypto Securities Registry

Overview: The Electronic Securities Act

Germany’s Gesetz über elektronische Wertpapiere (eWpG — Electronic Securities Act) entered into force on 10 June 2021. The Act fundamentally changed German securities law by eliminating the requirement for a physical paper certificate (Urkunde) as the legal basis for a security — a requirement that had been in German law since the nineteenth century.

Under the eWpG, German-law securities can now be issued in two forms:

• Central register securities (Zentralregisterwertpapiere): Registered in an electronic central register operated by a recognized CSD (typically Clearstream Banking AG, the German CSD)
• Crypto securities (Kryptowertpapiere): Registered in a decentralized crypto securities registry based on DLT, operated by an entity authorized by BaFin

The distinction matters: central register securities use conventional centralized infrastructure and are the default path for issuers seeking minimal departure from current market practices. Crypto securities use DLT infrastructure and enable the legal certainty of German law with the operational characteristics of blockchain settlement.

Crypto Securities: The DLT Path

A Kryptowertpapier (crypto security) under the eWpG is a security whose legal existence is established by registration in a decentralized crypto securities registry. The registration in the registry — not a paper document or CSD account entry — constitutes the security and its initial allocation to the first holder.

Transfer mechanism: Transfer of a crypto security is legally effective under German law when the crypto securities registry is updated to reflect the new holder’s entry. The registry update is the legal transfer event — not a subsequent instruction to a CSD or a paper endorsement. This aligns with the on-chain transfer mechanics of token standards: when a token is transferred on the DLT, the security has been legally transferred under German law.

Legal protection: eWpG provides the holder of a crypto security with the same legal protections as the holder of a conventional German security — including the “good faith acquisition” protection that prevents a prior owner from reclaiming the security from a bona fide purchaser who acquired it in a valid DLT transfer.

BaFin Authorization for Crypto Securities Registries

Operating a crypto securities registry requires BaFin authorization under the eWpG. BaFin evaluates:

• The technical architecture and security of the DLT system
• Governance rules for participant access and registry administrator authority
• The legal framework ensuring the registry’s compliance with eWpG requirements
• The operator’s financial resources and fit-and-proper management
• Operational resilience and business continuity planning

BaFin has adopted a technology-neutral stance — the eWpG does not mandate a specific blockchain protocol. Permissioned DLT systems (R3 Corda, Hyperledger Fabric, private Ethereum networks) are eligible; public permissionless blockchains face higher scrutiny on governance and control grounds.

As of 2025, several entities have received or are seeking BaFin authorization for crypto securities registries, including SWIAT (a Deutsche Börse and DekaBank initiative) and Bankhaus Metzler for specific bond issuances.

Scope Limitations: Bearer Bonds First

The initial eWpG applies to two categories of securities:

1. Bearer bonds (Inhaberschuldverschreibungen): The primary target; German law bearer bonds can be issued as electronic securities (central register or crypto securities)
2. Fund units (Investmentfondsanteile): Electronic issuance of investment fund units was enabled through concurrent amendment of the Capital Investment Code (KAGB)

Not yet covered: Shares (Aktien) in German companies cannot yet be issued as electronic securities under the eWpG. The German government has indicated its intention to extend the eWpG to shares in a future legislative step — a change that would enable tokenized equity in German companies, including GmbH (private limited) and AG (public company) shares.

Practical Uptake and Benchmark Issuances

Since the eWpG’s entry into force, several significant electronic bond issuances have taken place:

EIB Digital Bond (2021): The European Investment Bank issued a €100 million 2-year digital bond using a French law DLT framework in collaboration with Goldman Sachs, Santander, and Société Générale. While not a German law issuance, this demonstrated institutional demand for DLT bond infrastructure that German law could now accommodate.

Siemens Digital Bond (2023): Siemens AG issued a €60 million digital bond under the eWpG — the first major German corporate digital bond under the new framework. The issuance used a BaFin-authorized crypto securities registry and demonstrated the practical feasibility of the German legal path for investment-grade corporate issuers.

KfW Digital Bond (2024): Germany’s state development bank KfW issued a €100 million blockchain-based bond using the eWpG framework, with settlement in central bank digital currency (wholesale CBDC) through Deutsche Bundesbank’s experimental DLT system. The KfW issuance represents the most institutionally significant German eWpG issuance to date.

BaFin Oversight and MiCA Integration

BaFin supervises the eWpG alongside its broader securities and financial market infrastructure supervision. As MiCA comes into full effect across the EU, the interaction between the eWpG and MiCA’s CASP framework will become more significant: crypto securities registries that also provide exchange or custody services for crypto-assets will need to navigate both regimes.

BaFin has published guidance indicating that the eWpG and MiCA operate in parallel — the eWpG governs the legal existence and transfer of securities-type digital assets, while MiCA governs the services provided in relation to crypto-assets more broadly. Entities operating in both spaces need BaFin authorization under each applicable framework.

Key References

• BaFin — Electronic Securities
• BaFin Regulator Profile
• Germany Jurisdiction Profile
• MiCA Regulation Overview
• EU DLT Pilot Regime