Germany’s Deka Digital Asset Monitor has become a key reference point for understanding the country’s fast-evolving market for tokenized securities. Produced by DekaBank alongside industry partners, the report offers detailed data on issuance volumes, blockchain adoption, and regulatory shifts, providing a rare, data-driven view into how digital assets are reshaping traditional finance in one of Europe’s most advanced regulatory environments.
Germany has quietly positioned itself at the forefront of an emerging financial market: tokenized securities. Thanks to its Electronic Securities Act, introduced several years ago, the country has created a fully regulated environment for issuing and trading securities directly on blockchain networks — without the need for traditional paper-based processes.
Under this regime, bonds, shares, and fund units can be issued natively on blockchain systems, with a token itself representing the legal security. Crucially, such activity requires a license from Germany’s financial regulator, BaFin, yet the market remains open to both established financial institutions and new entrants. This mix has given rise to a dynamic ecosystem where fintech firms such as Cashlink and Smart Registry operate alongside legacy players like DekaBank — currently the only bank holding a registrar license.
The developments are closely tracked by the Digital Asset Monitor, a semi-annual report produced by DekaBank, consulting firm Intas, the Frankfurt School Blockchain Center, and WM Datenservice. The latest edition reveals a nuanced picture: while the first half of 2025 saw 40 new issuances, total issuance volume fell sharply to about €100 million from roughly €615 million in the latter half of 2024. That earlier surge was driven by the European Central Bank’s blockchain settlement trials, which facilitated high-value transactions from major institutions such as Siemens.
One striking feature of the German market is its reliance on public blockchains like Polygon and Avalanche, despite regulatory trends that could favor private, permissioned systems. Under forthcoming Basel capital rules, banks may face significantly higher capital requirements for holding securities issued on public blockchains without governance mechanisms to meet know-your-customer and compliance standards. While issuers may remain indifferent to the choice of blockchain, for banks and other regulated investors the decision could shape future market growth.
Secondary market activity — a crucial element for attracting institutional investors — is still in its infancy. The EU’s DLT Pilot Regime, in force since 2023, created a framework for blockchain-based trading and settlement systems. Although trading under this regime has yet to take off, platforms like 21X are preparing to launch. In parallel, over-the-counter blockchain-based transactions have been executed, including trades between DekaBank and KfW, and later between Berliner Volksbank and Berlin Hyp AG. These used conventional payment systems for settlement, underscoring the need for integrated blockchain payment solutions.
That payment challenge was temporarily addressed during the ECB’s trials, which tested three approaches: a Bundesbank “trigger” linking blockchains to the Target2 system, a Bank of Italy connection to TIPS, and a wholesale central bank digital currency (CBDC) issued by Banque de France. With the trials concluded, the ECB plans to consolidate these into a single access point by late 2025 or 2026, allowing market participants to settle securities in central bank money on blockchain platforms.
Until then, the absence of a permanent, scalable digital settlement method is slowing adoption. Issuers are cautious, awaiting clarity not just on technical infrastructure but also on regulatory treatment of capital requirements. The European Insurance and Occupational Pensions Authority (EIOPA) is weighing similar rules for insurers, potentially limiting another pool of institutional demand.
Despite these hurdles, industry participants remain optimistic. They point to growing infrastructure, early secondary market activity, and sustained interest from both government and European institutions. With the United States still lacking a comparable regulatory framework for tokenized securities, Germany — and Europe more broadly — retains a first-mover advantage. Whether it can convert that into lasting leadership will depend on regulatory clarity, operational readiness, and the ability to transition from pilots to live, large-scale operations.
For now, the German market for tokenized securities offers a glimpse of how traditional finance and blockchain technology may converge — not in theory, but within a regulated, functioning legal environment. The next two years will test whether that convergence can scale beyond early experiments and into the financial mainstream.
Digital Asset Monitor in English
Digital Asset Monitor in German
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