Digital Finance

The Electronic Securities Act (eWpG) is a legal framework that governs the issuance and transfer of securities in electronic form. With the introduction of the eWpG, traditional paper certificates are being replaced by electronic registries to make the trading and administration of securities more efficient and secure. It has been in effect since June 2021.

The eWpG establishes a legal framework for the issuance and custody of electronic securities, such as stocks, bonds, or investment fund shares. It sets forth the requirements for the issuance, transfer, and custody of these electronic securities and governs their legal status as well as the rights and obligations of the parties involved.

By transitioning to electronic securities, the eWpG enables faster and more efficient transaction processing, as the transfer of securities takes place electronically and in real time. It also reduces costs and administrative burdens compared to the physical custody of paper certificates. Another important aspect of the eWpG is investor protection and the security of electronic securities. The law establishes strict security standards for electronic custody and transfer to prevent manipulation, theft, and misuse.

The new regulation contributes to the modernization of securities trading and creates a legal foundation for the digital transformation in the financial sector.

The BAI contributed to the evaluation of the eWpG with a statement dated March 13, 2026. As an association, we support the modernization of securities law, but we also identify a need for further adjustments: The focus is on more practical regulations, the reduction of regulatory uncertainties, and greater European harmonization in order to better harness the potential of electronic securities for the fund industry.

eWpG

Regulation (EU) 2023/1114 on Markets in Crypto-Assets entered into force on June 29, 2023. As part of the package to digitize the financial sector, it is intended to help establish a European regulatory framework for crypto-assets while promoting innovation. In particular, it contains transparency and disclosure requirements, as well as provisions designed to prevent market abuse involving crypto-assets. MiCAR distinguishes between primary market activities and secondary market services.
Furthermore, MiCAR distinguishes between the public offering and the admission of crypto-assets to trading, as well as the provision of crypto-asset services. Its structure is organized into different categories: Title II covers other crypto assets, including utility tokens; Title III covers asset-backed tokens; and Title IV covers e-money tokens. Title V regulates the authorization and obligations of crypto asset service providers (CASPs), for example, in relation to custody, exchange, or the operation of trading platforms. In addition, Title VI includes, in particular, transparency and disclosure requirements—such as the preparation of white papers—as well as provisions to prevent insider trading and market manipulation. Crypto assets that qualify as financial instruments are generally subject to existing capital markets regulations (KAGB, eWpG) and are excluded from the scope of MiCAR. Technical standards and guidelines at Levels 2 and 3 provide further details on the requirements.

MiCAR Level 2 and 3 measures  ESMA info page Bafin info page

The Financial Market Digitalization Act (FinmadiG) serves to transpose EU law into national law and to establish a comprehensive regulatory framework. Specifically, it implements the regulatory provisions of MiCAR, the DORA package, and the GTVO, and harmonizes terminology at the German level with European standards. The FinmadiG is in effect since December 30, 2024.

In addition, there is the KMAG, which supplements the application and enforcement of MiCAR in Germany. In particular, it regulates the duties and powers of BaFin, cooperation with other supervisory authorities, and supplementary provisions regarding authorization and ongoing supervision. Further regulations concern public offerings and admission to trading, the prosecution of market abuse, accounting and auditing, as well as provisions on criminal penalties and administrative fines.
 

FinmadiG KMAG KMMV

The Ordinance on Crypto Fund Units regulates the legal provisions for trading and managing units in investment funds that invest in cryptocurrencies.

KryptoFAV

The Crypto Transfer Regulation governs the legal provisions for the transfer of cryptocurrencies and sets out measures to combat money laundering and terrorist financing.

KryptoWTransVO

The DLT Pilot Regime (“Distributed Ledger Technology” – DLT) took effect on March 23, 2023, and provides a legal framework for trading and settling transactions involving crypto-assets. It is also part of the European Commission’s “Digital Finance Package” and is initially set to run for three years.

The Commission did not submit its own report on an extension by the end of June 2026, as originally planned. Instead, as part of the “Market Integration and Supervision Package” (MISP) presented in December 2025, the Commission proposed further developing the DLT Pilot Regime. Plans include, among other things, an expansion of eligible financial instruments, higher volume limits, and the removal of the time limit on authorizations for DLT market infrastructures.

The regime is of particular importance for the development of a secondary market for tokenized financial instruments: It enables authorized DLT market infrastructures to organize trading and settlement based on DLT and to combine both functions within a single system.

ESMA maintains a register of all authorized DLT market infrastructures: Authorized DLT Market Infrastructures

REGULATION (EU) 2022/858

The Digital Operational Resilience Act is part of the package for the digitalization of the financial sector and primarily serves to strengthen the resilience of the European financial sector. The DORA regulation is intended to create a standardized framework to regulate cyber security on the financial markets and prevent the risks associated with modern communication technologies. To this end, it places requirements on companies with regard to cyber security, ICT risks and digital operational resilience. The regulations are applicable from 17 January 2025.

DORA Bafin info page ESMA info page