What is the eWpG? Electronic securities explained

Short answer

The German Electronic Securities Act (Gesetz über elektronische Wertpapiere, eWpG) entered into force on 10 June 2021 and allows securities to be issued without a paper certificate: the certificate is replaced by an entry in an electronic securities register (Section 2(1) eWpG). It covers bearer bonds and, since 15 December 2023, shares as well (Section 1 eWpG). A crypto security is an electronic security entered in a crypto securities register kept on a tamper-proof recording system (Sections 4(3) and 16(1) eWpG). Legally, every electronic security is deemed a thing (Sache) within the meaning of Section 90 of the German Civil Code (BGB) (Section 2(3) eWpG).

At a glance

In force since 10 June 2021 (Art. 12 of the Act of 3 June 2021, Federal Law Gazette I p. 1423), last amended by Art. 26 of the Act of 4 February 2026 (Federal Law Gazette 2026 I No. 33).
Scope (Section 1 eWpG): bearer bonds, registered shares and bearer shares, the latter only in a central register.
Two register types: central register (Sections 12 to 15 eWpG) and crypto securities register (Sections 16 to 23 eWpG).
Legal fiction: an electronic security is deemed a thing within the meaning of Section 90 BGB (Section 2(3) eWpG).
Keeping a crypto securities register generally requires authorisation (Section 32(1) in conjunction with Section 1(1a) sentence 2 no. 8 German Banking Act, KWG); exceptions exist, among others, under Section 32(1f) KWG.

What does the eWpG govern and since when has it applied?

The Electronic Securities Act (eWpG) was adopted as Article 1 of the Act of 3 June 2021 (Federal Law Gazette I p. 1423) and entered into force on 10 June 2021 pursuant to Art. 12 of that Act. For the securities it covers, the eWpG ends the requirement of a paper certificate. The current version was last amended by Art. 26 of the Act of 4 February 2026 (Federal Law Gazette 2026 I No. 33).

The core mechanism is set out in Section 2(1) eWpG: an electronic security is issued by the issuer effecting an entry in an electronic securities register instead of issuing a certificate. Under Section 2(2) eWpG, an electronic security has the same legal effect as a security issued by means of a certificate, unless the eWpG provides otherwise.

Before the entry, the issuer must deposit the terms and conditions with the registrar, i.e. make them accessible to everyone as a durable electronic document (Section 5(1) eWpG). If the security is not entered within three months of deposit, the registrar deletes the terms and conditions. The Federal Financial Supervisory Authority (BaFin) supervises the keeping of electronic securities registers (Section 11 eWpG).

Which securities can be issued electronically?

Under Section 1 eWpG, the Act applies to three groups. The list is exhaustive: shares in a German limited liability company (GmbH) or limited partnership interests are not covered.

Bearer bonds (Section 1 no. 1 eWpG), for example fixed-rate bonds or profit participation certificates structured as bearer bonds.
Registered shares (Section 1 no. 2 eWpG), in a central register or in a crypto securities register.
Bearer shares, but only if they are entered in a central register (Section 1 no. 3 eWpG).

Shares were added by the Future Financing Act (Zukunftsfinanzierungsgesetz, Act of 11 December 2023, Federal Law Gazette 2023 I No. 354). The transitional rule in Section 33 eWpG refers to 15 December 2023 for shares, the date of entry into force under Art. 35(1) of the Future Financing Act (ZuFinG). Units in contractual investment funds (Sondervermögen) managed by a capital management company (KVG) follow a separate route: Section 95(1) of the German Investment Code (KAGB) permits electronic unit certificates, and under Section 1 of the Crypto Fund Units Ordinance (KryptoFAV) these can be entered in a crypto securities register as crypto fund units.

Electronic security, crypto security, token: what is the difference?

Electronic security is the umbrella term. A central register security is an electronic security entered in a central register (Section 4(2) eWpG). A crypto security is an electronic security entered in a crypto securities register (Section 4(3) eWpG).

The term token does not appear in the eWpG. A token is the technical representation of a right on a blockchain or another distributed recording system. Whether a token is a crypto security is decided not by the technology but by the entry in a register that meets Section 16(1) eWpG: Section 4(4) eWpG requires the register details under Section 17 eWpG to be recorded with a clear reference to the deposited terms and conditions.

A recording system within the meaning of the eWpG is a decentralised arrangement in which control rights are distributed among the operating entities according to a predetermined pattern (Section 4(11) eWpG). A crypto securities register must be kept on a tamper-proof recording system that logs data in chronological order and protects it against unauthorised deletion and subsequent alteration (Section 16(1) eWpG).

Central register or crypto securities register?

The eWpG provides for two types of electronic securities registers (Section 4(1) eWpG). The table below compares the main statutory differences.

Feature	Central register	Crypto securities register
Legal basis	Sections 12 to 15 eWpG	Sections 16 to 23 eWpG
Who keeps the register?	A central securities depository or a custodian expressly authorised by the issuer in text form (Section 12(2))	The entity designated by the issuer vis-à-vis the holder, otherwise the issuer (Section 16(2))
Technology	No decentralised system required	Tamper-proof recording system (Sections 16(1), 4(11))
Shares	Registered and bearer shares	Registered shares only (Section 1 no. 3, Section 17(1) no. 8(a))
Supervisory threshold	Registrar must be a central securities depository or a custodian licensed for safe custody business (Section 12(2), Section 4(5), (6)); in addition, notification to BaFin before starting entries (Section 12(4))	Generally authorisation under Section 32(1) in conjunction with Section 1(1a) sentence 2 no. 8 KWG for crypto securities register keeping
Book-entry settlement	Mandatory if a central securities depository keeps the register and is entered as holder (Section 12(3))	No corresponding rule in the eWpG
Register extract	No obligation under Section 19	For consumers holding individually entered crypto securities: after entry, on every change and once a year (Section 19(2))

Moving a crypto security to another electronic securities register requires the consent of all holders or of BaFin (Section 22 eWpG). By contrast, the issuer may change the registrar of a crypto securities register without the holders' consent, unless the terms and conditions or the articles of association provide otherwise (Section 16(2) sentence 3 eWpG).

What is the legal nature of an electronic security?

An electronic security is deemed a thing within the meaning of Section 90 BGB (Section 2(3) eWpG). This legal fiction ensures that ownership, transfer of title and good-faith acquisition follow property-law principles, even though no physical object exists.

Transfer of title: the security must be re-registered to the acquirer on the instruction of the entitled person, and both must agree on the transfer of ownership (Section 25(1) eWpG). Until re-registration, the entitled person remains the owner.
Good-faith acquisition: in favour of a person acquiring by legal transaction, the register content is deemed complete and correct, unless the acquirer knows otherwise or is grossly negligent in not knowing (Section 26 eWpG).
Presumption of ownership: for the duration of the entry, the holder is presumed to be the owner (Section 27 eWpG).
Collective entry: if a central securities depository or custodian is entered, the entitled persons are deemed co-owners in fractional shares (Section 9(1) eWpG).

Register keeping as such does not constitute custody within the meaning of the German Securities Deposit Act (Section 7(4) eWpG). Register keeping and custody are therefore separate functions that may require different licences.

What are the practical advantages and limits of the eWpG?

Electronic securities replace the global certificate with a register entry. A public issuance shows the practical effect: according to its press release of 30 June 2026, the German state of Saxony-Anhalt issued a crypto security with a volume of EUR 100 million and a two-year term, achieving settlement on the issue date (t+0) instead of the usual five-day processing period.

Advantage: transfer by re-registration, without physical delivery of a certificate (Section 25 eWpG).
Advantage: statutory duties of the registrar regarding integrity, authenticity and accuracy of the register, with liability for damages (Section 7(1) to (3) eWpG).
Advantage: holders of bonds in a crypto securities register have an extraordinary termination right if they have unsuccessfully set the issuer a reasonable deadline to restore the register's functionality (Section 30 eWpG).
Limit: as a rule, there is no right to individual certificates (Section 6(1) eWpG).
Limit: crypto securities register keeping generally requires authorisation, and according to BaFin a KWG licence does not serve as a European passport for other EEA states. According to BaFin, a European passport is possible with an authorisation as a crypto-asset service provider.
Limit: the eWpG governs the form of issuance, not distribution. Prospectus or information sheet requirements and investor protection rules apply in addition.

For investors, the electronic form does not change the economic risks. An electronic security carries the same issuer risk as a certificated security, up to and including total loss. Outside a trading venue, a sale may be restricted, which creates liquidity risk.

How does heartstocks implement electronic securities?

heartstocks GmbH, based in Hamburg and active since 2021, supports issuers as a B2B partner in the digital issuance and settlement of alternative capital market products as tokenised securities under the eWpG, KAGB and AktG (German Stock Corporation Act). According to its own figures (as of 2026), heartstocks has supported more than 15 tokenisation projects, structured more than EUR 200 million in volume and completed more than 5 regulatory approval processes (securities prospectus or subscription documents).

For heartstocks, tokenisation is a means, not an end: securities such as bonds or shares are issued as electronic securities under the eWpG, and every transaction, every change of holder and every distribution is documented in the eWpG register. heartstocks structures fixed-rate bonds, bonus-interest bonds, profit participation certificates, preference and ordinary shares as digital securities, as well as tokenised units in KAGB structures (AIF or investment stock corporation, InvAG). For KAGB structures, heartstocks works with a connected registered KVG as a partner.

Technically, the tokens are issued in the Nyala register and held in custody via Tangany. Investors subscribe after digital onboarding with video identification, pay in euros by SEPA transfer and need neither their own wallet nor crypto knowledge. Their holding is entered in the eWpG register and visible in the investor dashboard. For investment brokerage, heartstocks acts as a tied agent exclusively on behalf and under the liability of CONCEDUS GmbH.

This article provides general information on the legal situation and does not replace individual legal or investment advice.

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Frequently asked questions

Since when have electronic securities existed in Germany?

The eWpG entered into force on 10 June 2021. Since then, bearer bonds can be issued electronically. Shares were added by the Future Financing Act, with 15 December 2023 as the reference date (Art. 35(1) ZuFinG).

Is a crypto security a crypto-asset under MiCAR?

Crypto securities are usually transferable securities and therefore financial instruments; in that case MiCAR does not apply (Art. 2(4)(a) MiCAR). The relevant definition is that of a financial instrument under Art. 4(1)(15) MiFID II. Crypto securities are then governed by securities law, such as the eWpG, the Prospectus Regulation and the WpPG.

May the issuer keep its crypto securities register itself?

Under Section 16(2) eWpG, the issuer is deemed the registrar if it does not designate another entity. However, crypto securities register keeping generally requires authorisation (Section 32(1) in conjunction with Section 1(1a) sentence 2 no. 8 KWG); exceptions exist, among others, under Section 32(1f) KWG. In practice, issuers therefore designate a licensed registrar. In issuances with heartstocks, the tokens are issued in the Nyala register; register keeping is carried out via regulated partners.

How is an electronic security transferred?

Transfer requires re-registration in the register on the instruction of the entitled person and agreement on the transfer of ownership (Section 25(1) eWpG). Ownership passes only upon re-registration. The right under the security passes together with title (Section 25(2) eWpG).

Can bearer shares be issued as crypto securities?

No. Bearer shares fall under the eWpG only if they are entered in a central register (Section 1 no. 3 eWpG). Only registered shares are possible in a crypto securities register, as Section 17(1) no. 8(a) eWpG also shows.