The federal German government and blockchain startups operating in Germany seem to have reached an understanding to advance the use of blockchain technology, which is the basis for cryptocurrencies worldwide.
Berlin has announced its willingness to open a consultation process on how to better exploit the potential of blockchain technology. Government sources said Berlin wants to develop a blockchain strategy by the summer.
The government is said to have invited companies and industry groups that might become stakeholders in a blockchain deployment process in Germany. These stakeholders were invited to provide recommendations.
Media reports say potential participants in this consultation process and investors hope to transform mass market processes via blockchain. Among the industries that might benefit greatly from adopting blockchain are the automotive, pharmaceuticals and energy industries, as well public sector administration.
Germany has no shortage of blockchain firms but lacks the legal framework that will legalize their businesses. The government said there are at least 170 firms involved in blockchain tech and many of them are located in Berlin, which is fast becoming the country's hub for all things blockchain.
Berlin now vies against London, New York, San Francisco and Singapore for the coveted, ifdubious, title of crypto capital of the world.
While the federal government is interested in the technology, it's unclear if it's looking at crafting and implementing pro-blockchain legislation that will help advance the adaptation of this technology. Berlin still ranks among governments that urge caution toward cryptocurrencies dependent on blockcchain.
Only a few countries (fewer than 10, by one count) have developed comprehensive strategies on how to nurture blockchain startups. These startups said that without a legal framework for blockchain development, the high entrance hurdles to the tech will remain.
Blockchain functions as a digital ledger that stores information in a distributed manner. It shares the same function as a spreadsheet, albeit an online version, which is duplicated and shared across multiple users.
This inherent decentralization means every time the spreadsheet is updated, users with a copy will have theirs updated as well.
Blockchain is looked at with suspicion by traditional bankers because the technology may disrupt financial system. It will one day displace banks as the hubs overseeing financial transactions between different parties.
Blockchain champions were early on motivated by challenging the dominance of central banks and standing-up to the global financial system. Berlin played a key role in the anarchistic roots of blockchain.
This article was first published in IBTimes US. Permission required for reproduction.