Berechtigungsscheine as an Emerging New Asset Class in Germany

Eligibility certificates (Berechtigungsscheine) are short of becoming a new asset class in Germany.

Since January 2021, the Federal Government of the Federal Republic of Germany has been distributing authorization certificates intended for the purchase of goods with practically no prior notice. Within a few days, markets were created where the certificates of entitlement are now traded. For example, old people or pregnant women were initially benefited by the distribution of “Berechtigungsscheine”. Due to their fungibility, entitlement certificates can be traded so that they can also be used as a means of payment and storage of value for a specified period.

Fungibility (from Latin fungibilis) is generally the property of goods to be determinable according to unit of measure, number or weight and therefore to be exchangeable within the same category for other items of the same type, quantity and quality. This characteristic is also given in the certificates of entitlement issued by the federal government of Germany. Authorization certificates are printed like banknotes in the Bundesdruckerei.

The housing entitlement certificate (Wohnberechtigungsschein), abbreviated to WBS, which has already been introduced in Germany, is not fungible. An applicant must meet certain legal requirements in order to receive a housing entitlement certificate. Colloquially, the housing entitlement certificate is also called § 8 certificate. This is an official certificate in Germany with the help of which a tenant can prove that he is entitled to move into an apartment (social housing) subsidized with public funds. What is new in the system now begun by the federal government of Germany is the fungibility property of the entitlement certificate, as was also the case at the time of the war economy.

Entitlement certificates are similar in function to food stamps (Lebensmittelmarken). A food stamp is a document issued by public authorities to certify that the owner can buy a certain food in a certain amount. In times of need, especially during war, such tokens are issued to the population, supposedly in order to better manage the general shortage of consumer goods.

Different brands can be grouped together in grocery cards (Lebensmittelkarten), because in addition to food, other consumer goods, e.g. rationed heating material (coals), clothing, luxury goods such as cigarettes and alcohol as well as gasoline. The permits are then usually called reference certificates. A special occasion – such as the birth of a child – had to be present or an application had to be made in order to be issued a voucher.

The term “entitlement certificate” (“Berechtigungsschein”) now used by the federal government is known from the German Democratic Republic (DDR). The authorization certificate to receive a GDR visa was the prerequisite for “visits and trips by persons with permanent residence in Berlin (West) to enter the capital of the GDR” (East Berlin) or the GDR itself. Another example are authorization certificates (Berechtigungsscheine) for drinking spirits. The drinking brandy for miners was a brandy that was given out to miners in the Soviet occupation zone and later in the GDR as deputation wages.

At the beginning of the 1960s, a shortage of supplies also meant that certain foods such as butter and meat were temporarily rationed in the GDR. You could only get these groceries at your place of residence upon presentation of a business-related customer ID. A transfer certificate from the local dealer was required for holidays or stays abroad.

The value of entitlement certificates results on the one hand from the rationing, on the other hand from the difference between the personal contribution to be made by the holder of the subscription and the (black) market price of the goods. The system introduced by the federal government of Germany provides for a so-called “personal contribution” (“Eigenbeteiligung”).

Rationing is known from many socialist or communist countries. In Cuba, for example, the distribution of food is rationed. Rationing in Cuba is known as the Libreta de Abastecimiento (“reference booklet”) or Libreta for short. This system determines the reference quantities for each person and the frequency of allocation.

In order to organize the supply of the starving population, the People’s Republic of China also continued to use authorization certificates at least until the end of the Mao period, with which scarce goods were distributed among the needy population.

The system of entitlement certificates now introduced by the Federal Republic of Germany initially only benefits individual population groups such as certain over 60-year-olds or pregnant women. On the (black) markets, prices are currently emerging that are based on the value of the goods to be purchased. For example, there are already numerous offers of authorization certificates on Ebay.

Berechtigungsscheine for twelve FFP2 masks are currently offered for 24 euros on Ebay, for example, but also for 16.50 euros or 37 euros. For the buyer there is an additional payment of 2 euros for each set of 6 masks. It cannot be said with certainty whether the authorization certificates offered on the online portals actually all come from Bundesdruckerei. Likewise, according to testing services in Germany, there is no guarantee that the FFP2 masks that can be obtained would withstand a test by the TÜV.

Whether Berechtigungsscheine can establish themselves as a new asset class depends on the duration of the issue of Berechtigungsscheine, the period of validity of the Berechtigungsscheine and – among other factors – on whether further goods and services will only be available in the future on presentation of entitlement certificates due to shortage management.

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