The German government aims to introduce regulations for startups related to financial innovation in the country, as per the newly created legislation concerning “Future Finance Act” brought forward by finance ministry on April 5, 2023, as stated by Cointelegraph.
According to Cointelegraph, context of the legislation consists of capital markets digitalisation using the issuance of electronic securities on a blockchain and compatibility of crypto assets. Insights from the draft bill stated that Germany’s “capital market should become more modern and efficient in order to mobilize more private capital for future investments.”
Based on information by Cointelegraph, the legislation decreased the required market capital for initial public offerings (IPOs) from 1.25 million euros to one million euros. Sources suggest that the legislation ensures investments for institutional participants belonging to startups, small businesses, and special purpose acquisition companies (SPACs).
“We want to make Germany the leading location for startups and growth companies. That is why we are improving access to the capital market and making it easier to raise equity. Small and medium-sized companies will also benefit from this,” Christian Lindner, finance minister, Germany, said.
Moreover, Cointelegraph noted that Germany believes that this initiative will increase Germany’s attractiveness towards investors and ensure growth of stock market investments. “Startups, growth companies and small and medium-sized companies should have easier access to the capital market,” Lindner highlighted.
(With insights from Cointelegraph)