Luxembourg has this month passed a new blockchain bill into law. Approved on February 14th and passed with overwhelming support – 58 out of 60 members supporting the bill – the key feature of Bill 7363 is that transactions completed with blockchain technology now have the same legal status and protection as those done through traditional means.
– the world’s first jurisdiction to introduce DLT regulation – Malta, Bermuda and Switzerland.
Appropriate regulation is widely considered to be an essential step in encouraging wider adoption of the technology, providing protection and generating confidence among both consumers and investors. With the passing of this latest piece of legislation, Luxembourg has taken a significant step in providing financial market participants with greater transparency and legal certainty regarding the circulation of securities with blockchain technology.
This initiative comes on the heels of the partnership announced between the VNX Exchange and the University of Luxembourg in November 2018. The partnership has the aim seeking solutions geared to improving digital asset security. This itself was a response to the Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial regulator, giving a sharp warning against investment in cryptocurrencies and ICO’s early in 2018.
With this new law providing protection to cryptocurrency traders and to investors in a way that many larger jurisdictions are still either refusing to do or lingering in achieving, it appears that Luxembourg is preparing to embrace rather than to stifle cryptocurrency and blockchain adoption within its borders. Alongside its small European neighbours – including Gibraltar – Luxembourg may well be helping to pave the way for larger countries to follow suit.
