Luxembourg, a European country has passed a bill that gives transactions done via blockchain the same legal standing as traditional ones. The bill which was passed on February 14, provides transparency to market participants while transactions are carried out on the distributed ledger technology (DLT), according to a media report on February 17.
58 Out of 60 Lawmakers Vote in Favor of the Bill
Reportedly, Luxembourg lawmakers recently passed bill 7363 on a vote of 58 out of 60. The bill allows blockchain transactions carried out by people to have the same legal protection as those that are done using the traditional methods.
According to the document:
The objective of Bill 7363 is to provide financial market participants with legal certainty for the circulation of securities via blockchain technology.
The document also noted that before the bill’s approval, there was no legal certainty when it comes to the transfer of securities using the DLT. Now, this is no longer the case. The bill also takes away the need for several intermediaries before transactions can be completed, thanks to the blockchain.
The Goal is to Ensure the Same Legal Protection and Strength
Pierre Gramegna, the country’s Finance Minister while speaking to The Luxembourg Times in 2018, stated that the goal is to ensure that if a person carries out transactions using blockchain, then they should have the same legal certainty and strength as if it was done using the traditional method, without blockchain.
Like other European countries such as Malta and Bermuda, Luxembourg is also encouraging the adoption of blockchain technology. Before this time, the University of Luxembourg had collaborated with VNX Exchange, a trading platform to enhance the security of cryptocurrencies. In this case, the school helps the VNX Exchange to improve the level of security of these virtual assets.
Low Adoption of Cryptocurrencies in Luxembourg
Nevertheless, BTCNN’s report from October 1, 2018, revealed that there is low adoption of cryptocurrencies in the country. A study at that time outlined that 92% of residents said they do not own virtual currencies. 6%, on the other hand, own Bitcoin and an entire 2% have Ethereum, Bitcoin Cash, and Ripple.
The low turn out of investors can also be attributed to Luxembourg’s Financial Regulator warning in 2018 about investing in cryptocurrencies as well as initial coin offerings. According to the regulator, these assets are not backed by the central bank, and there is also a volatility problem to deal with. Much more, digital currency deals may not be entirely transparent, and its business models are difficult to understand, they said.