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Luxembourg passes blockchain based securities bill

The European nation presented a new bill that includes a legal framework for the securities issued through the blockchain network. The Luxembourg parliament Chamber of Deputies passed the bill with 58 members who voted in support of the legislature.

The bill’s document says that Bill 7364 aims to provide financial market participants with legal security for the circulation of securities through blockchain technology. In addition, he notes that the bill should aim to provide better security for investors. And, at the same time, make the transfer of securities more efficient by reducing the number of intermediaries.

Registration of Values

Taking into account the latest technological amendments, the bill also modifies the 2001 law that orders the registration and distribution of securities through a secure electronic registry. Such as distributed accounting technology and in particular the chain technology of blocks.

In addition, the amendment specifically adds article 18a to the law that states:

“The account manager can have securities accounts and make securities records in securities accounts within or through secure electronic record devices, including electronic records or distributed databases. Successive transfers recorded in said secure electronic record device are considered transfers between securities accounts. The holding of securities accounts within said device guarantees the secure electronic registration or the registration of securities in securities accounts through said secure electronic record device does not affect the fungible nature of the securities in question.”

Another official document that proposed the bill before approving states that even blockchain values should be treated as traditional values. He says that the best way to do it is by using the token concept. This is from the technological point of view a new type of dematerialized security, but to which is attached from a legal point of view the same rights as dematerialized classic values.

Community Blockchain supports the bill

The local blockchain community of Luxembourg has welcomed the recent approval of the bill by its government. Lhoft CEO Nasir Zubairi told Delano, “Although some would suggest that the existing regulation was adequate. This new rule is welcome since it provides clarity on the settlement of values by blockchain, eliminating the ambiguity for Fintech companies and traditional institutions that are considering Blockchain or DLT technologies as a means to reduce Costs and optimizing value processes”.

The security tokens are witnessing a constant growth in the cryptography sector. Given that global regulators adopt a strict position on the issuance of tokens through the ICOs, more and more companies are willing to adopt STO to launch their digital tokens. The regulatory participation in the STO guarantees a layer of security for its investors, unlike the UCI.

Also published on Medium.

Published inCryptocurrenciesFintech

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