Under the Future Finance Act, the German government is pushing for more welcoming regulations for startups working with financial innovation.
The German government is pushing for further welcoming regulations for startups working with financial innovation in the country, according to the recently drafted legislation of the “ Future Finance Act ” introduced by the finance ministry on April 5.
Key goals of the legislation involve capital markets digitalization through the issuance of electronic securities on a blockchain and upgraded portability of crypto assets. According to a translated version of the draft bill, Germany’s “ capital market should come more modern and efficient in order to mobilize further private capital for future investments. ”
Among the government’s targets is to create a favorable environment for startups and investors in the country. The legislation reduces the minimum market capital for initial public offerings (IPOs) from 1.25 million euros ($1.37 million) to 1 million euros ($1.1 million). It facilitates investments by institutional players in startups, small firms, and special purpose acquisition companies (SPACs).
According to local media reports, the new regulations would apply to businesses employing up to 500 people and with revenues below 100 million euros ($109 million).
“ We want to make Germany the leading location for startups and growth companies," German finance minister Christian Lindner said in a statement. “ That's why we're improving access to the capital market and making it simple to raise equity. Small and medium-sized companies will also profit from this. ”
The government claims the move would make Germany more attractive to investors and promote a culture of stock market investments. “ Startups, growth companies, and small and medium-sized companies should have easier access to the capital market, ” the minister said.
Germany is a member of the G7, a group of the world's seven biggest democracies. Together, G7 members are working on tougher crypto regulations, which numerous in the industry believe could stymie innovation and growth. The G7's new agenda is expected to be disclosed at its coming meeting in Hiroshima, Japan, which is scheduled for May.
(ANA PAULA PEREIRA, Cointelegraph, 2023)