The European nation, Luxembourg is slowly becoming a hotspot for blockchain space and has just passed a bill that provides a legal framework for securities issued over blockchains. Under the bill, blockchain securities have the same status as traditional securities.
The bill titled ‘7363‘ aims to provide financial market participants with legal certainty for the circulation of securities via blockchain technology. The transfer of securities via the blockchain does not yet have legal certainty. The bill should provide greater certainty for investors and make the transfer of securities more efficient by reducing the number of intermediaries.
Back in April 2013, Luxembourg also passed a bill making it possible to legally issue “dematerialized securities” via an amendment of a securities law passed in 2001. Regarding the passing of recent blockchain securities bill, the chamber stated that the new bill further amends the 2001 law and will also include the registration and distribution of securities using secure electronic registration systems, such as distributed ledger technology and in particular blockchain technology.
A snippet from the recent passed amendment notes “Account-keeper may hold securities accounts and make registrations of securities in securities accounts within or through secure electronic registration devices, including distributed electronic registers or databases. Successive transfers recorded in such a secure electronic registration device are considered like transfers between securities accounts. Holding of securities accounts within such a device secure electronic registration or registration of securities in securities accounts through such a secure electronic recording device do not affect the fungible nature of the securities concerned.”
Editor’s note: Some statements were translated from French.