Financial Crime World

Blockchain Security Measures Take Center Stage in Luxembourg’s Regulatory Framework

Strengthening Financial Hub Position with Electronic Distributed Ledger Technology

Luxembourg has updated its laws to facilitate the use of electronic distributed ledger technology (DLT) in collateral over financial instruments registered on securities accounts. This update, effective March 9, 2023, ensures the legal protection of creditors even in the event of technological disruption.

Completing Luxembourg’s Regulatory Framework with Blockchain III Law

The new Blockchain III Law, also known as bill of law 8055, completes Luxembourg’s regulatory framework around DLT-based financial instruments and transposes EU Regulation 2022/858 on a pilot regime for market infrastructures based on distributed ledger technology. The law redefines the notion of financial instruments to include those arising from European regulations.

Luxembourg’s Leading Role in Embracing Blockchain Technology

Luxembourg has been at the forefront of embracing blockchain technology, having recognized its equivalence to traditional transactions with the passage of the Law of 1 March 2019 and expanding access to dematerialized securities with the Law of 22 January 2021. The country’s unique legal framework now covers the full value chain around collateral held in DLT securities, from development to maintenance.

Expected Benefits

  • Drive growth in security token issuance
  • Benefit international issuers and stakeholders from Luxembourg’s competitive regulatory environment
  • Solidify the country’s position as a key crypto asset center

Deloitte’s Expertise in Blockchain Regulatory Compliance

Deloitte’s Wayfinder Regulatory Watch solution helps businesses stay informed on regulatory updates and anticipate changes impacting their operations. The firm’s Advisory and Consulting services can assist with:

  • Defining digital asset strategies
  • Implementing custody and organizational aspects of DLT assets
  • Assessing reporting standards
  • Providing data analytics support

A Stronger Financial Hub for International Investors

As the regulatory landscape continues to evolve, Luxembourg’s strengthened framework is expected to attract international investors and further solidify its position as a financial hub of choice.