New Blockchain Law in Luxembourg Paves Way to Mainstream Adoption

February 28, 2019

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Luxembourg lawmakers delivered a perfect Valentine’s Day gift to all blockchain lovers and financiers on Feb. 14 when they passed a new blockchain bill into law. The document grants all transactions performed with the help of this technology the same legal status as those made via traditional means. 

 

It matters to the VNX Exchange community because it validates the underlying distributed ledger technology that serves as a backbone for our platform. It matters to the financial industry in Luxembourg and other European countries because blockchain adoption brings its players a step closer to a different future. In this future cross-border financial transactions, relationships between different financial institutions and retail investors are made easier.

 

Luxembourg has long been on the forefront of supporting large-scale blockchain adoption. As Luxembourg Times has rightly pointed out, without this law it would have be hard for the country to complete for a prime spot as the go-to jurisdiction for blockchain in Europe. 

 

And it will no doubt be a race. In fact, it’s already happening. In mid-December the European parliament issued a resolution seeking to promote the adoption of blockchain in the EU. 

 

“The EU has an opportunity to become a leading actor in the field of blockchain and international trade, and […] it should be an influential factor in shaping its development globally, together with international partners,” the resolution reads.

 

European countries have long surpassed the US in how far they are willing to go in adopting blockchain technology. Europe, and Luxembourg as one of its leading fintech hubs, is well positioned to take the lead.

 

Within VNX Exchange and our community the goal has always been to use the best technology for our trading platform. This is why in late November VNX signed a partnership with the University of Luxembourg’s Interdisciplinary Centre for Security, Reliability and Trust (SnT) at Le Freeport, to ensure security on blockchain and safety of digital asset transactions. 

 

Blockchain technology is a perfect tool for creating digital assets. Tokenizing venture capital funds’ portfolios is one way to use blockchain to create such assets. ”The token economy is arriving and venture capital is on the front lines,” writes VentureBeat

Its author, Stephen McKeon, is a chief strategy advisor at the Security Token Academy and a finance professor at the Lundquist College of Business at the University of Oregon.

 

“In the coming years, blockchain tokens will offer VC funds a new mechanism to raise capital and maintain control of the investor base, and the impact will not be confined to those firms investing in blockchain technology,” he writes.

 

Raising capital and solving the issue of long capital lock-in and lack of liquidity that venture capital funds have historically faced is exactly the problem VNX Exchange is trying to solve. By offering tokenized VC portfolios for trading, our platform delivers that one-two punch that the financial industry needs to open up for more investors.

 

“Once investors in VC funds develop a taste for a liquid secondary market, it will be hard to pull them away,” writes McKeon.

 

Author: Anton Abashkin, COO, VNX Exchange