Last week the Luxembourg parliament adopted a bill that recognizes DLT-based securities as collateral. It also expands the definition of financial instruments to include those issued under the EU’s DLT Pilot Regime, which comes into force later this month.
Rather than making any major adaptations to the laws on creation, perfection and enforcement of collateral arrangements, it extends the definition of financial instruments to include those issued on DLT, as Ashurst and Allen & Overy reported.
Luxembourg has been one of the earliest jurisdictions to support blockchain-based securities. In 2019 it introduced laws that supported the registration and transfer of DLT-based securities. It subsequently extended that to support the issuance of dematerialized securities using distributed ledger or blockchain.
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