LUXEMBOURG Law and Practice Contributed by: Andreas Heinzmann, Valerio Scollo and Angela Permunian, GSK Stockmann
an obligation for all crypto-asset service provid - ers involved in crypto-asset transfers to collect and make accessible data on the originators and beneficiaries of the transfers they operate (see 10.3 Classification of Blockchain Assets ). Upcoming Changes in EU Legislation As further elaborated in this chapter, many top - ics relating to virtual assets and other recently developed technologies used in the financial sector had not been explicitly covered by the traditional financial services regulation. The Markets in Digital Assets Regulation (MiCA) plays significant regulatory influence on digital assets by creating a single regulatory framework for three main types of digital assets: • asset-referenced tokens (ARTs); • electronic money tokens (EMTs); and • utility tokens. With the full implementation of MiCA in January 2025, digital asset issuers and service providers (CASPs) are subject to licensing and oversight by national authorities, facilitating a harmonised and secure EU digital market. The Digital Operational Resilience Act (DORA), which took effect in January 2025, is expected to have an impact on the financial sector, with its main goal to strengthen the cybersecurity and operational resilience of financial institutions. The fintech market may also be impacted by the updates of several regulations and direc - tives impacting the financial sector, including the lately adopted amendments to the MiFID II/ MiFIR framework and AIFMD. Lastly, the European Commission published a proposal for the EU Financial Data Access Reg -
ulation (FiDA), which is expected to come into effect in 2027 and is aimed at enhancing digital transformation in the financial sector through the development of open finance. The goal is to require data holders to share the financial data of customers, such as data on mortgages, crypto-assets, investments in financial instru - ments, insurance-based investments, or non- life-insurance products. The recent months saw a surge in use of AI models in fintech products and services in Lux - embourg, both in governmental and private initiatives. For example, the Financial Sector Supervisory Commission (CSSF) signed a stra - tegic agreement in December 2024 to develop its own artificial intelligence initiative, enhanc - ing the CSSF’s prudential activities and improv - ing big data processing. This shows the com - mitment of governmental bodies to integrate advanced technologies and keep the pace with the growing fintech industry. 2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models There are a variety of different types of fintech companies in Luxembourg, including payments, big data, and AI, insurtech, cybersecurity and authentication, Fundtech, regtech, lending and blockchain. Especially in the e-payment and e-commerce sectors, Luxembourg is the home to leading industry players such as Amazon, PayPal, Airbnb, and Rakuten, which are licensed and supervised by the CSSF as banks, payment service institutions, e-money institutions or vir - tual asset service providers, as the case may be. Furthermore, a significant number of fintech companies in Luxembourg provide services
504 CHAMBERS.COM
Powered by FlippingBook