The digital transformation of the financial market must focus more on European concepts. Florian Rentsch, Financial Centre Commissioner of the Hessian state government, is strongly advocating for this. „I don't just want it to be discussed at a national level,“ said Rentsch at the „Frankfurt meets Berlin“ conference held on 11 June at the Hessian representative office in the capital, in response to the question of how the business location can be strengthened. The financial centre Frankfurt is very internationally oriented, he noted, underpinned by the presence of around 150 foreign banks – a status that is „not God-given“.

According to Rentsch, institutions such as the European Central Bank, the International Sustainability Standards Board (ISSB), and the Anti Money Laundering Authority (AMLA) in the financial centre on the Main add to the good framework, since investors often seek proximity to regulators. The former FDP politician has been chairman of the board of the Association of Sparda Banks in Frankfurt since 2017. He has held the office of Special Representative for the Hessian State Government since last November. In order to mobilise more private capital, as the new CDU/SPD federal government is striving to do, the structures of the financial centre must be constantly reviewed and further developed, especially in the context of digital transformation, Rentsch emphasised.

The tokenised economy also offers enormous advantages for the financial centre: transactions are faster and more cost-effective. At the Frankfurt meets Berlin conference, organised by the International Bankers Forum, speakers and panellists agreed that Germany is playing a leading role in the digital transformation, thanks to early national legislation and smart regulation on electronic securities and crypto assets. „We are indeed strategically well ahead,“ stated Alexandra Hachmeister, Director General Digital Euro at the Bundesbank. From the perspective of the Frankfurt financial centre, however, it is important to build bridges to the political centre in Berlin. „The financial industry is undergoing radical change as a result of digitalisation.“

Assets-on-chain also include cash-on-chain, explained Hachmeister. This is where the Bundesbank sees its role. The provision of digital central bank money to industry in the form of wholesale euros is too often overlooked in comparison to retail euros. The Bundesbank and the ECB have now tested transactions with „real money“ worth 1.6 billion euros in wholesale pilot projects. As a first step, interoperable connections to existing Target services could now be created in the coming months. In the longer term, this should enable the settlement of international financial market transactions.

KfW has gained extensive experience with market players in the issuance of electronic securities. KfW Group Treasurer Tim Armbruster referred to financial market stability as a key criterion.

However, maintaining Germany's competitive edge requires constant further development. In the US, the Trump administration has pushed through „aggressive legislation“ in the form of the Genius Act and the Stable Act – two bills designed to regulate stablecoins, mitigate potential risks and protect consumers. After what was, for the US, an uncharacteristic deep sleep, Sleeping Beauty has been kissed awake, said Christoph Hock, Head of Tokenisation & Digital Assets at Union Investment. The UK is testing the token economy for the financial market in sandboxes and, as a late starter, is benefiting from experiences gained on the continent.

Doris Dietze, Head of Division at the Federal Ministry of Finance for Financial Market Regulation, made reference to the EU Commission, which is working on proposals for a deeper European capital markets union, in which digital business models will be made possible and trade barriers will be removed. The German coalition agreement promises to strengthen demand for pension provision, and the scale-up and start-up industry. The new federal government also intends to continue the WIN initiative to mobilise private capital.