Germany’s Blockchain Ecosystem: A Technology Nation Forging New Paths
Germany has woken up to the digital era. The country is home to a growing blockchain industry, and the government is recognizing its potential.
As a leading technology nation, Germany hosts a vibrant blockchain industry. According to data from LSP Digital, there are 120 blockchain startups in Germany. 64 of those firms are based in Berlin.
Source: LSP Digital, as of Sept. 2018
Germany also has one of the highest concentrations of Bitcoin nodes. According to Bitnodes data, the country accounts for one-fifth of worldwide Bitcoin nodes, which puts it second to the U.S.
Thomas Schouten, Head of Marketing at the blockchain App development platform Lisk, says, “Statistics showing a significant concentration of Bitcoin nodes in Germany illustrates a bigger trend within the country. […] The Berlin scene especially is growing incredibly fast. Bitcoin nodes are just the tip of the iceberg.”
Germany’s blockchain industry is well-diversified
Users and traders of digital currencies will find a relatively well-developed infrastructure in Germany. In the meantime, Germany’s regulated securities exchanges have also entered the game. The country’s second largest exchange, Boerse Stuttgart, announced in 2018 that it was building an end-to-end infrastructure for digital assets. Germany’s largest stock exchange, Deutsche Boerse Group, has set up a unit called “DLT, Crypto Assets and New Market Structures” that explores the disruptive potential the technology could have for financial markets infrastructure, as well as the new products the company could develop to enhance its existing offerings.
Beyond digital currencies, Germany’s blockchain startups are exploring opportunities in various sectors, from banking and real estate to supply chain management and intellectual property. Multinationals have also taken the leap into blockchain. Automobile giant Daimler, for example, launched various blockchain projects. The company has introduced a digital coin, MobiCoin, and issued an Ethereum-based Schuldschein.
But the industry that has gained the most traction so far is the energy sector. According to Handelsblatt, 13% of German energy companies have started to use blockchain technology, exploring applications such as green energy certification, energy storage, and even p2p energy trading.
National blockchain strategy is in the making
In Q1 2019, Germany has seen a number of first-evers. Bitbond has launched Germany’s first Bafin-approved Security Token Offering (STO). Brickblock has tokenized the first real estate asset in Germany.
With the private sector moving ahead, lawmakers have realized the potential of the technology.
In February, the government has begun a consultation process, asking domestic blockchain companies and industry groups how they use the technology. This consultation is the first step ahead of a blockchain strategy formulation, intending to finalize a national blockchain strategy by summer 2019.
In March, Germany’s justice and finance ministries released a proposal to launch a state-run register to regulate the country’s blockchain industry. The purpose of the register is to promote the use of blockchain and position Germany as a leader in the field of financial technology.
Despite a slow start compared to other nations, it’s safe to say that the technology powerhouse Germany has now woken up and is ready to defend its position as a global technology leader. In the years ahead, we will likely see more innovative startups emerging in Germany, leveraging the country’s high level of technological expertise and integrating blockchain technology into our personal and business lives.