LUXEMBOURG Trends and Developments Contributed by: Álvaro Garrido Mesa and Agustina Torino Martínez, Legal Node
2026 – the “Bridge Year”: When Traditional and Digital Projects Converge Following several years characterised by accelerated regulatory development and pilot sandboxes, the digi - tal asset market has progressively pivoted towards a more stable and institutional phase. With a view to identifying the key developments affecting regulated digital asset activities in 2026, this article considers the consolidation of the EU’s and Luxembourg’s digital asset market through the practi - cal application of: • Regulation (EU) 2023/1114 on markets in crypto- assets (MiCA); • Regulation (EU) 2022/2554 on digital operational resilience for the financial sector (DORA); • Regulation (EU) 2022/858 on a pilot regime (the “Pilot Regime”) for market infrastructures based on distributed ledger technology (DLT); and • the Luxembourg Law of 20 December 2024, nota - bly amending the Luxembourg Law of 6 April 2013 on dematerialised securities (“Blockchain Law IV”). Last year, EU digital assets regulation continued to show consistent signs of market maturity, with a steady growth in the number of licensed crypto- asset services providers (CASPs) authorised under MiCA and in the number of published White Papers for electronic money tokens (EMTs) and for crypto-assets other than asset-referenced tokens (ARTs) and EMTs, as well as the first signs of market adoption of the Pilot Regime with six authorised DLT market infrastructures and live trading activity as of the date of this article. At the same time, the Pilot Regime is entering a decisive phase of regulatory assessment, as it was designed to run for an initial period of three years from its application date (23 March 2023), with the possibil - ity of extension by the European Commission; accord - ingly, March 2026 sits within the key policy window in which decisions on extension, scope and potential integration into a more permanent EU market-infra - structure framework are expected to crystallise. In particular, Luxembourg has consolidated its posi - tion within the EU as a leading European hub for digital asset projects, encompassing both regulated
crypto-asset activities and the tokenisation of tradi - tional financial instruments within established EU and national securities law frameworks. The EU ranks among the clearest legal frameworks in the world in terms of the certainty of the legal quali - fication of a crypto-asset as such (regulated under MiCA) or as a financial instrument (regulated under traditional financial regulations), owing to the Euro - pean Securities and Markets Authority’s (ESMA) Final Report titled “Guidelines on the conditions and crite - ria for the qualification of crypto-assets as financial instruments” – this was initially published in December 2024 and established a straightforward and objective set of parameters to determine the applicable regime for each token type. Building on its long-established role as an interna - tional financial centre and fund hub, Luxembourg has increasingly been selected by institutionally rel - evant actors as a jurisdiction for the structuring and deployment of crypto-asset activities subject to MiCA authorisation requirements. This trend is evidenced by several of the largest traditional and digital asset actors seeking status as CASPs with the Luxembourg financial regulator (CSSF) including entities with a direct local MiCA licence such as Clearstream Bank - ing S.A., Bitstamp Europe S.A., Coinbase Luxem - bourg S.A. and Zodia Custody (Europe) S.A. Furthermore, the ecosystem is bolstered by entities providing services in the Grand Duchy via the MiCA notification framework – such as Altarius Asset Man - agement Limited, which has specifically notified Lux - embourg as a host member state, as well as LGT Bank AG and Interactive Brokers Ireland Ltd, both of whom have passported their crypto-asset services into the jurisdiction. The CSSF has also approved the publication of 33 White Papers for crypto-assets other than ARTs and EMTs, strengthening its reputation as a reliable and diligent regulator, which is trusted by other national competent authorities and sheltered from controversy in that respect. The alignment of groundbreaking legislative initiatives, more extensive supervisory practice and vast market
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