The post Luxembourg updated DLT bill adds ‘control agent’ role for digital securities appeared on BitcoinEthereumNews.com.

The Luxembourg Ministry of Finance has proposed a fourth DLT bill. It would add an optional role of “control agent,” who would be responsible for issuing digital securities, tracking the amount of the issuance, and maintaining a record of ownership. The European country has been one of the more supportive jurisdictions when it comes to the issuance of securities on distributed ledger technology (DLT)—a decentralized ledger network that uses multiple nodes to ensure data security and transparency, and the technology on which blockchains are built. Luxembourg is one of the world leaders for fund issuance, second only behind the United States, with around €5 trillion ($5.4 trillion) worth of assets under management in 2022. The country has also proven popular for DLT issuances, with three of the Luxembourg-headquartered European Investment Bank’s four DLT bonds having been issued using the country’s laws.  In 2022, Luxembourg finalized laws supporting native digital securities on DLT, and last year, it completed its DLT framework with the “Blockchain III Law,” which allows the use of DLT as collateral over financial instruments registered on securities accounts. As things stand, the issuance and record keeping of digital securities are the responsibility of a central account keeper—custodian—or central securities depository. However, Luxembourg Ministry of Finance stated, in its announcement of the new rules on July 24, that it views the central account keeper role as more onerous than it needs to be because it involves two sets of custodians—the central account keeper and account keeper—having to reconcile between each other. A DLT shared ledger, it argued, would reduce this reconciliation burden: “This new model based on a control agent constitutes an alternative to the existing model which requires the establishment of a double-tier chain of custody between the central account holder and the secondary account holders. Dematerialized securities registered on an issue account…

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Filed under: News - @ August 3, 2024 8:16 am