Digitalisation is fundamentally changing the world. The financial sector, politics and supervisory authorities must recognise the opportunities of technological progress for the industry and jointly tackle its challenges.
When adopting the European financial market regulation, the legislator could not foresee technological developments such as Distributed Ledger Technology (DLT). This now results in regulatory obstacles for the implementation of DLT-based market infrastructure. The same is true at national level, for example shares may only be issued by means of a paper certificate, and the mandatory central securities depository stands in the way of the new concept of Decentralised Finance. At the same time, the European financial industry finds itself competing with other global financial centres that are working on innovative concepts to further develop the financial market architecture.
In order to ensure that German investment fund companies catch up with the digital transformation and the technological competitiveness of the financial industry, BVI is promoting a national blockchain initiative for the asset management sector. By using DLT, transactions could be processed quickly, securely and efficiently. The goal is to bring together players from the financial industry, politics and supervisory authority to agree on a technical architecture for trading in digital assets. An essential building block is the introduction of a digital euro as a means of payment for DLT applications. In order to be able to trade fund shares via blockchain, digital fund shares would have to be introduced in the German Capital Investment Code (the Kapitalanlagegesetzbuch). In addition, BVI advocates enabling a digital market infrastructure under EU law and allowing funds to acquire bitcoin or tokenised tangible assets.
Other fields of action of BVI in the area of digitalisation are cyber security and the use of artificial intelligence in asset management.