LUXEMBOURG Trends and Developments Contributed by: Alvaro Garrido Mesa and Bersaitz Alegre, Legal Node
Blockchain Law IV This new law strengthens the legal framework for tokenisation of assets through dematerial - ised securities, by building on the three previous “Blockchain Laws” (the Law of 1 March 2019, the Law of 22 January 2021 and the Law of 15 March 2023), which provide a legal framework for the issuance and trading of dematerialised security tokens, and the possibility to grant col - lateral over such tokens. The key innovations introduced by the Block - chain Law IV are the possibility to tokenise dematerialised equity securities, and the intro - duction of the “control agent” figure, which is an EU-based investment firm or credit institu - tion responsible for overseeing dematerialised securities issued on DLT, as a measure to reduce custody layers while ensuring compliance. Notable tokenisation initiatives In 2024, Luxembourg saw a surge in security token initiatives across various sectors, solidify - ing its leadership in digital securities. Notable projects included new European Invest - ment Bank (EIB) DLT-based bond issuances, showcasing instant settlement capabilities in the context of the Eurosystem exploratory work. These efforts supported two key experiments: first, an initiative for wholesale central bank money settlement via the HSBC Orion plat - form (operated by HSBC Continental Europe, Luxembourg), interoperating with the Banque de France’s DL3S platform; and second, using Banque de France’s exploratory cash tokens for settlement through Goldman Sachs’ GS DAP tokenisation platform. Another notable example of an innovative DLT- issuance of securities is the Blockstream Mining Note 2 (BMN2), a security token backed by Bit -
coin mining hashrate, successfully issued on the Liquid Network and facilitated by Luxembourg- based virtual asset service provider STOKR, building on the success of Blockstream’s previ - ous issuance (BMN1). In the realm of tokenisation of real estate, pro - jects such as Blochome expanded their foot - print, enabling fractional ownership of prime real estate properties through the issuance of security tokens, highlighting a community-driven approach to tokenised real estate investments. In the private equity and fund tokenisation space, Luxembourg-based platforms such as Tokeny and FundsDLT have facilitated fund tokenisation for asset managers, offering investors improved distribution and accessibility. A good example is the involvement of Tokeny in Fasanara Capital’s launch of its first tokenised money market fund (FAST) on a public blockchain. Another exam - ple is Franklin Templeton announcing the launch of the first fully tokenised Luxembourg-based UCITS fund on a public blockchain. Finally, a noteworthy project is the one led by HQLAx, which has established itself as a key platform in Luxembourg for the collateralisation of digital assets, providing solutions that allow institutions to use digital assets as collateral in financial transactions, contributing to greater market efficiency and optimised use of capital. 2025 Trends and Developments Looking forward to 2025, Luxembourg is poised to witness a rapid acceleration in the institutional adoption of digital assets. Financial institutions are increasingly embracing innovative technolo - gies, regulatory frameworks and strategic part - nerships to position themselves at the forefront of the digital economy.
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