Luxembourg Passes Blockchain Framework Bill Into Law

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Luxembourg lawmakers have passed bill 7363 into law, facilitating the use of blockchain technology in financial services, according to an official announcement published by the country’s parliament, the Chamber of Deputies, on Feb. 14.

The new law aims provide financial market participants with more 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.

According to local news outlet Luxembourg Time, the bill grants transactions done with blockchain technology the same legal status and protection as those done through traditional means. Out of 60 parliamentarians, only two members of the left-wing party déi Lénk reportedly voted against the bill.

Luxembourg is known for its proactive approach to blockchain technology. In November 2018, the University of Luxembourg partnered with Luxembourg-based trading platform VNX Exchange in a bid to improve the security of digital assets. Within the collaboration, the University of Luxembourg purportedly helps VNX develop higher levels of network security for digital assets.

In March, the Luxembourg Financial Regulator CSSF issued a warning against investments in cryptocurrencies and initial coin offerings (ICOs). The regulator noted in the warning that cryptocurrencies are not backed by any central bank, and warned against the volatility of virtual currencies, stressing that deals are often not entirely transparent and business models are incomprehensible.

Meanwhile, a study conducted by research company Ipsos on behalf of Dutch ING Bank B.V. in June revealed that the lowest rate of people owning cryptocurrency — 4 percent — rate is in Luxembourg.