Plugin Issue #28_Blockchain 2020 in Germany

The Taylor Wessing e-journal
Issue #28
Blockchain 2020
in Germany

EDITORIAL
The Blockchain Strategy of the German Federal Government addresses the main topics concerning the
future development of DLT and Blockchain in Germany. This PlugIn issue deals with the legal impact of the
Strategy and the potential lack of regulation that challenges the industry for the time being. We will focus
our summary on the sectors of Banking and Finance, Energy and Logistics.

CONTENT
Dr. Eduard Hofert
Associate, Hamburg
Legal Challenges Associated with the Adoption of Smart Contracts in the
Industry 4.0
4
Dr. Markus Böhme
Salary Partner, Düsseldorf
Dr. André Lippert
Salary Partner, Berlin
Dr. Anna L. Izzo-Wagner
Salary Partner, Frankfurt
Ulrich Reers
Partner, Frankfurt
Lea Maria Siering
Salary Partner, Berlin
Till Christopher Otto
Associate, Frankfurt
Dr. David Klein
Salary Partner, Hamburg
Blockchain use cases resulting from Federal Government’s strategy for the
energy sector
Crypto Assets and Crypto Custody – Germany’s two sided pioneering role 6
Regulatory sandboxes 7
Supply Chain on the Chain 8
5
Issue #28
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Legal Challenges Associated with the Adoption of Smart
Contracts in the Industry 4.0
The German government recently issued a strategy paper dealing with legal
challenges connected to the implementation of the blockchain technology in German
industry, in particular the obstacles associated with the adoption of smart contracts as
part of industry 4.0. This article will highlight the recent developments, essential legal
challenges and will return to the respective approaches introduced by the German
government to address the downsides associated with the implementation of smart
contracts.
Between a Cypherpunk Vision and the Industrial
Implementation
The term “smart contract” has its roots in the mid-1990s. Nick Szabo introduced the
concept as “a computerized transaction protocol that executes the term of a contract”
(see for instance here). The term “smart contract” significantly gained popularity with
the introduction of the Ethereum blockchain and other distributed ledgers serving as
background architecture in order to realize the cypherpunk vision described by Szabo
nearly 25 years ago. This point marked a technological breakthrough, as on…
Dr. Eduard Hofert
Associate, Hamburg
PROFILE
READ MORE
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Blockchain use cases resulting from Federal
Government’s strategy for the energy sector
Where is blockchain technology currently used in the energy
sector?
Currently, there are various use cases in the energy industry for blockchain
technologies where the technology creates or could potentially create benefit. These
range from pricing to changing suppliers to the design of prosumer roles. The latter
becomes particularly relevant in a more decentralised energy market. Many consumers
are already active market participants with their own energy sources such as solar and
geothermal energy. With the expected smart meter rollout in 2020, intelligent metering
systems will become part of their everyday lives. Whether the smart meter gateway
can use blockchain to link data from energy production, storage and consumption is
currently being investigated in a feasibility study by the BMWi (Ferderal Ministry for
Economic Affairs and Energy).
Other current use cases for blockchain technology can be found in e-mobility (charging
infrastructure), electricity trading via peer-to-peer platforms (certification of green and
regional electricity products) and plant management (use of decentralised micro
facilities for congestion management). Finally, certification offers a large and…
AUTHORS
Dr. Markus Böhme
Salary Partner, Düsseldorf
PROFILE
Dr. André Lippert
Salary Partner, Berlin and Düsseldorf
PROFILE
READ MORE
Issue #28
5

Crypto Assets and Crypto Custody – Germany’s two sided
pioneering role
With the official announcement of the amended German Banking Act
(Kreditwesengesetz, KWG) on 12 December 2019, companies and business models in
the sector of Crypto–Currencies and DLT services are going to face increasing
challenges and opportunities.
The German parliament took the legislative initiative of offering a “safe haven” for
private and institutional investors of crypto assets, granting a higher level of investor
protection and legal certainty in comparison with the lawmakers of the still nonharmonized
legislation in the European Union. The parliament took the first step
towards the overarching goal of helping to develop the German Blockchain-Ecosystem
into practice, as announced with the Blockchain-Strategy of the federal government.
AUTHORS
Dr. Anna L. Izzo-Wagner
Salary Partner, Frankfurt
PROFILE
With the recent amendments to the German Banking Act, the service of crypto asset
custody is henceforth subordinated to the supervision of the German Federal Financial
Supervisory Authority (BaFin).
A former draft of the German Banking Act within the course of the legislative procedure
asked for a strict separation of crypto-custody services on the one hand and any other
regulated financial services on the other hand, even for fully licensed banking…
Ulrich Reers
Partner, Frankfurt
PROFILE
READ MORE
Issue #28
6

Regulatory sandboxes
A new approach to the regulatory and supervisory treatment
of innovative financial activities
AUTHORS
Regulatory sandboxes are one of the possible measures to promote innovation in the
fintec sector. What are the benefits and what is the regulatory landscape?
Compliance regulatory requirements are burdensome for the companies and can
hamper growth. In order to promote the development of innovations, some Member
States grant waivers to start-ups in the financial sector, the so-called “regulatory
sandboxes”.
Dr. Lea Maria Siering
Salary Partner, Berlin
PROFILE
What are regulatory sandboxes?
A “regulatory sandbox” is a concept that enables firms to test innovative products,
services or business models. Within such sandbox, regulatory obligations are partly not
applicable.
In a regulatory sandbox, the competent authorities waive the application of…
Till Christopher Otto
Partner, Frankfurt
PROFILE
READ MORE
Issue #28
7

Supply Chain on the Chain
One of the topics in the Blockchain Strategy of the Federal Government in Germany
concerns the logistics sector. With this, the Federal Government follows the paper of
“Chances and Challenges of DLT (Blockchain) in Mobility and Logistics [German
Read]” from the Bundesministerium für Verkehr und Digitale Infrastruktur (Federal
Ministry of Transportation and Digital Infrastructure) from earlier in 2019. The logistics
sector is one of the industries known for already existing projects concerning the use of
Blockchain and other Distributed Ledger Technologies (DLT).
Logistics and Blockchain: Why it is a perfect match
Blockchain technology supports with its capability to provide trust between several
parties that are unknown to each other so far. Furthermore, Blockchain allows the
automation of specific processes that are built on trust. The shipping of goods from A to
B includes several logistics service providers and contractual parties. The parties in
this scenario have different interests and priorities concerning the success of delivery
of the goods, therefore, this might serve as a role model for the application of
Blockchain or DLT technology use cases. Furthermore, the legal challenges with
Blockchain and DLT use cases usually lie in the field of data protection through the…..
Dr. David Klein
Salary Partner, Hamburg
PROFILE
READ MORE
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ISSUES
#27 Tech trends #26 Cyber security #25 Advertising
#24 Gaming
#23 Real Estate #22 The sky is the limit? #21 Digitization and Competition #20 Autotech
#19 Digitalisierung und Vertrieb #18 Digitising Disputes #17 The Laws of AI #16 Bedeutende Digitalthemen
#15 Digitalisierte Finanzbranche #14 IoT & Licensing #13 Maritime Industry #12 Digital Asia
Issue #28
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