Lawmakers in Luxembourg passed a bill that will allow the use of blockchain technology in financial services. The so-called ‘Bill 7363’ was implemented immediately, according to an official announcement published by the country’s parliament, the Chamber of Deputies, on February 14.
The law will boost the level of transparency and legal certainty regarding the circulation of securities using blockchain technology. Furthermore, it will benefit financial market participants in the country by eliminating middlemen involved in the transfer of securities, making the process more efficient.
A local media outlet, Luxembourg Time, said in its report that the bill would give transactions conducted with blockchain technology a similar legal status and protection, as those carried out via traditional methods. The bill received massive support from the lawmakers, as only two members, out of 60 parliamentarians, voted against it.
Luxembourg has become one of the leading crypto and blockchain friendly countries in the world. In November, the University of Luxembourg collaborated with trading platform, VNX Exchange to help improve the security of crypto assets. The partnership will see the University of Luxembourg help the exchange develop higher levels of network security for crypto assets.
However, the country has not been entirely open to crypto investments. In March of 2018, the Luxembourg Financial Regulator CSSF issued a warning against crypto and ICO investments. The regulator defended this stance citing the fact that cryptocurrencies are not backed by the central bank, and implying investors could lose their money due to the volatility of the market.
Cryptocurrency adoption is very low in Luxembourg despite the crypto-friendly nature of the government. A study carried out by research company Ipsos, on behalf of Dutch ING Bank B.V., showed that Luxembourg has the lowest rate of people owning cryptocurrency, with only 4 percent of its population possessing digital currencies.