Lawmakers in The Grand Duchy of Luxembourg, the small landlocked country in western Europe, have approved a regulatory framework to grant transactions undertaken with blockchain technology the same legal status as traditional ones.
According to a details of a meeting held by the country’s Chamber of Deputies, the county’s parliament, passed the bill on February 14 with 58 members supporting the legislation and only two voting against.
The new law aims to provide further transparency and legal certainty in regard to the circulation of securities with blockchain technology. The bill is also geared to make the transfer of securities more efficient by reducing the number of intermediaries.
Providing Greater Certainty For Investors
The country’s Finance Minister, Pierre Gramegna has been pushing for more clarity regarding the laws and regulations relating to blockchain technology.
“The goal is to make sure that, if you do transactions using blockchain, you have legal certainty and the same legal strength as if you had done the same transaction without using blockchain, in a traditional manner,” he said last year.
The online document states: “The transfer of securities via the blockchain does not yet have legal certainty. The bill should provide greater certainty for investors and make the transfer of securities more efficient by reducing the number of intermediaries”.
Last year, the Luxembourg Financial Regulator (CSSF) issued a warning against investing in cryptocurrencies and initial coin offerings, saying that the business models could be baffling and deals were often unclear. They reiterated that crypto was not backed by any central bank and that because of crypto’s volatility, investing could be risky.
Despite being a European financial hub, only four percent of people in Luxembourg actually own cryptocurrencies, says a 2018 survey by Ipsos on behalf of ING, the Dutch banking and financial services corporation. However, it does appear to be proactive in its approach to the technology. The University of Luxembourg partnered with the Luxembourg-based VNX Exchange in order to improve the security of digital assets.
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