This newest legislation introduces the possibility of using a monitoring agent for securities issuance. The agent will fully utilise DLT technology in carrying out its missions, which include maintaining the issuance account, tracking the chain of title for securities, and reconciling issued securities. This new, optional regime for issuers offers an alternative to the existing model which currently requires a two-tier holding chain between the central account keeper and secondary account keepers. The new law does allows for increased efficiency for securities issuance via distributed ledger technology.
Following the first three Blockchain Laws, implemented between 2019 and 2023, this new legislation confirms Luxembourg’s pioneering role within the European Union in the use of DLT technology, particularly in the domain of dematerialised securities issuance. Luxembourg’s leadership has been once again illustrated in the past few weeks with the launch of a digital bond by the European Investment Bank on HSBC’s Luxembourg-based Orion platform as well as Franklin Templeton’s tokenised money market fund in Luxembourg.