A Bill That Gives Blockchain Securities Legal Status Was Passed in Luxembourg

Luxembourg’s parliament passed a bill that will make the use of blockchain technology in financial services easier by providing a legal framework for securities issued through it, the Chamber of Deputies published this Thursday.

The bill, titled Bill 7363, aims to provide legal certainty and transparency to financial market participants when using blockchain technology to issue securities. The publication further states that the bill should make the transfer of securities more efficient “by reducing the number of intermediaries”.

The bill was passed on Feb. 14th with massive approval. Out of 60 members of parliament, 58 supported the legislation and only 2, from the left-wing party déi Lénk, voted against it. According to a publication from a local news outlet, the Luxembourg Time, transactions done using blockchain technology are granted the same legal status and protection as ones done through traditional means.

In April 2013 Luxembourg passed a bill, making the legal issuence of “dematerialized securities” possible through an amendment made to a securities law from 2001. The bill from this Thursday further amends this law to include the registration and distribution of securities using secure electronic registration such as DLT (Distributed Ledger Technology), and blockchain technology.

Even though Luxembourg has a proactive approach to blockchain technology, only around 4% of its population own cryptocurrencies, according to a 2018 study. This however, did not stop the University of Luxembourg from partnering up with Luxembourg-based VNX Exchange last year, in an attempt to improve the security of digital assets.