Tokenisation Regulation

Germany Tokenisation Law (eWpG) Explained

Germany's Electronic Securities Act (eWpG) has fundamentally reshaped how securities can be issued and transferred digitally. For wealth managers and family offices conducting regulatory due diligence, understanding this framework is no longer optional.

What Is Germany Tokenisation Law? The eWpG at a Glance

Germany tokenisation law took a definitive step forward on 10 June 2021, when the Gesetz über elektronische Wertpapiere — the eWpG — came into force. The Act allows bearer bonds (Inhaberschuldverschreibungen) to be issued as purely electronic securities, removing the centuries-old requirement for a physical global certificate (Globalurkunde) lodged with Clearstream. Electronic securities are entered into a securities register (Wertpapierregister) maintained either by a central register keeper, such as Clearstream, or — for crypto securities specifically — by a decentralised or distributed-ledger-based register. The Federal Financial Supervisory Authority, BaFin, supervises both register types and must be notified before any crypto-securities register goes live. This makes Germany one of the few G7 jurisdictions with a purpose-built statutory foundation for tokenised capital markets instruments, rather than relying on regulatory sandboxes or guidance letters.

Two-Track Architecture: Central vs. Crypto Securities Registers

The eWpG creates a clear binary: central securities registers (Zentralregisterwertpapiere) and crypto securities registers (Kryptowertpapierregister). Central registers mirror the existing Clearstream infrastructure — efficient, familiar to institutional custodians, but not truly decentralised. Crypto securities registers, by contrast, may use distributed ledger technology (DLT) and need not be operated by a bank or central depository. Any legal entity meeting BaFin's fitness-and-propriety standards and maintaining adequate technical and organisational controls may apply to operate one. This opens the market to regulated fintech operators and specialist token issuance platforms. Importantly, rights attached to a crypto security exist on the register itself — not on a separate paper instrument — giving the ledger entry genuine legal primacy. Investors and advisors should note, however, that secondary liquidity in crypto-securities registers remains limited compared with traditional venues, and operational risks associated with DLT infrastructure warrant careful diligence.

Scope, Asset Classes, and Current Limitations

In its current form the eWpG covers bearer bonds and, following the 2023 fund-token amendments (eWpG-Novelle), electronic fund units (Fondsanteile). Equities — ordinary shares in an AG — remain explicitly excluded from the eWpG's DLT track, a deliberate legislative choice linked to shareholder-register complexity under the Aktiengesetz. This means tokenised equity in a German legal wrapper still requires conventional share-register mechanics or a holding-company structure. For cross-border issuances targeting EU investors, advisers should layer the EU Pilot Regime for DLT market infrastructures (Regulation EU 2022/858) on top of eWpG analysis, as the two frameworks interact directly. ESMA has published technical standards under the Pilot Regime that affect permissible financial instruments, transaction thresholds, and CCP obligations — all of which must be mapped against the issuer's target investor universe and distribution strategy before launch.

BaFin Supervision, MiCA, and the Regulatory Interface

BaFin sits at the centre of Germany's digital-securities oversight. Crypto-securities register operators must obtain a separate authorisation that is distinct from a MiFID II investment-firm licence, a payment-institution licence, or a crypto-asset service provider (CASP) authorisation under MiCA. MiCA, which became fully applicable in December 2024, governs the issuance and trading of crypto-assets broadly — but explicitly carves out financial instruments already regulated under MiFID II, which includes eWpG securities. The practical implication: an eWpG crypto security does not need a MiCA white paper, but the platform facilitating its trading might require a CASP licence if it also handles crypto-assets that fall within MiCA's scope. Advisers must therefore map each product carefully against both regulatory regimes. BaFin has issued guidance (Merkblatt) clarifying the boundary, and ESMA has published Q&As that wealth managers should treat as primary source material alongside the legislation itself.

Liechtenstein's TVTG as a Complementary Framework

While Germany's eWpG addresses the domestic legal basis for tokenised securities, Liechtenstein's Token and TT Service Provider Act (TVTG, in force since 2020) offers a parallel — and in several respects broader — framework operating within the EEA. The TVTG takes a technology-neutral, rights-container approach: virtually any economic right can be tokenised and assigned legal validity on a trusted technology system. This makes Liechtenstein an attractive issuance jurisdiction for structures that fall outside the eWpG's current scope — for example, tokenised real assets, private equity interests, or structured notes with equity-linked features. Investhub operates within the Liechtenstein TVTG framework, enabling issuers to bring regulated token offerings to European and international investors with a compliant legal wrapper, stablecoin settlement functionality, and a secondary bulletin board for investor liquidity. Wealth managers advising cross-border clients should assess whether a Liechtenstein TVTG structure, a German eWpG structure, or a combination offers the optimal risk-return and compliance profile.

Due Diligence Checklist for Advisers and Family Offices

Before allocating client capital to any tokenised instrument — whether issued under the eWpG or a comparable framework — advisers should systematically address the following areas. Register integrity: who operates the securities register, under what authorisation, and what are the business-continuity and cybersecurity arrangements? Legal enforceability: has external counsel confirmed that token ownership translates into enforceable rights in the relevant jurisdiction(s)? Custody: are digital assets held with a regulated crypto custodian (§ 1 Abs. 1a KWG in Germany, or equivalent under TVTG in Liechtenstein)? Settlement finality: does the DLT protocol support irrevocable settlement, and on what timeline? Secondary liquidity: what trading or bulletin-board facility exists, and under what regulatory framework does it operate? Tax treatment: have the applicable jurisdiction's revenue authorities issued guidance on capital-gains and income characterisation? Each gap in this checklist represents a risk that should be quantified and documented in the investment committee memo.

Outlook: Convergence, Reform, and What Comes Next

German legislators have signalled further eWpG expansions, including potential inclusion of equity tokens, as the EU's broader Capital Markets Union agenda pushes member states toward harmonised digital-asset regimes. The EU DLT Pilot Regime, running until at least 2026 with an optional extension, is generating real-world data that will likely inform the next legislative cycle. At the EU level, ESMA continues to develop technical standards that will shape how crypto-securities can be traded and settled across borders. Wealth managers should treat the current framework as a living document rather than a stable endpoint. Practical takeaway: structure today's tokenised transactions with sufficient contractual flexibility — step-in clauses, fallback mechanics, governing-law optionality — to accommodate regulatory evolution without triggering a full restructuring. Engaging specialist legal counsel with cross-border DLT expertise at the outset is not a cost; it is risk mitigation.

Key Takeaways

The eWpG (2021) gives bearer bonds and fund units full legal validity as electronic entries in a BaFin-supervised securities register, eliminating the need for a physical certificate.
Crypto securities registers under the eWpG can be operated by non-bank entities on DLT, but require explicit BaFin authorisation and robust operational controls.
MiCA and the eWpG operate on parallel tracks: eWpG securities are MiFID II instruments and fall outside MiCA's white-paper requirements, but associated trading platforms may still need CASP licences.
Liechtenstein's TVTG offers a complementary EEA-regulated framework for asset classes not yet covered by the eWpG, including private equity interests and real-asset tokens.
Secondary liquidity in tokenised securities markets remains materially thinner than in conventional markets; advisers must document this illiquidity risk explicitly in client suitability assessments.

FAQ

What is the eWpG and what does it regulate?

The eWpG (Gesetz über elektronische Wertpapiere) is Germany's Electronic Securities Act, in force since June 2021. It allows bearer bonds and, since 2023, fund units to be issued and held as purely electronic entries in a supervised securities register, without requiring a physical certificate. Equities in German AGs are currently excluded from its DLT track.

Does Germany tokenisation law cover crypto assets under MiCA?

No — eWpG securities are classified as MiFID II financial instruments and are therefore carved out of MiCA's scope. They do not require a MiCA white paper. However, platforms that trade or custody these tokens alongside other crypto-assets may need a CASP authorisation under MiCA. Advisers should map each product and service individually against both regimes.

Who supervises crypto securities registers in Germany?

BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht) supervises crypto securities registers under the eWpG. Operators must notify BaFin before launch, satisfy fit-and-proper requirements, and maintain adequate technical and organisational controls. This is a separate authorisation from a MiFID II investment-firm or MiCA CASP licence.

Can tokenised equities (shares) be issued under the eWpG?

Not yet. Ordinary shares in a German Aktiengesellschaft (AG) are explicitly excluded from the eWpG's DLT track due to the complexity of shareholder-register requirements under the Aktiengesetz. Tokenised equity in a German wrapper therefore still relies on conventional share-register mechanics or holding-company structures. Legislative expansion is under discussion but not yet enacted.

How does Liechtenstein's TVTG differ from Germany's eWpG?

Liechtenstein's TVTG (Token and TT Service Provider Act) is technology-neutral and covers virtually any economic right that can be represented on a trusted technology system — including private equity interests, real-asset rights, and structured instruments. The eWpG is instrument-specific, currently limited to bonds and fund units. Both operate within the EEA legal framework, making them complementary tools for cross-border capital-markets structuring.

What are the main risks of investing in eWpG crypto securities?

Key risks include limited secondary liquidity compared with traditional securities, DLT infrastructure and cybersecurity risk, register-operator business-continuity risk, evolving regulatory treatment across jurisdictions, and tax uncertainty in some member states. Advisers should document each risk dimension explicitly in suitability assessments and investment committee memos before allocating client capital.

Germany's eWpG represents a serious, enforceable legal foundation for tokenised securities — not a regulatory experiment. For wealth managers and family offices, the framework offers genuine opportunities to access diversified, digitally-settled capital-market instruments within a supervised perimeter. The risks — illiquidity, operational, and cross-border regulatory — are real and must be assessed with the same rigour applied to any alternative investment. Investhub supports regulated issuers across Liechtenstein and the broader EEA, combining compliant token issuance, stablecoin settlement, and secondary market access. If you are conducting due diligence on a tokenised offering or evaluating issuance structures for your clients, speak with our team.