Yesterday Luxembourg’s primary financial regulator, Commission de Surveillance du Secteur Financier (CSSF), published a whitepaper about blockchain. The document covered more than the risks, but this was the focus.
Consider that regulators don’t have an easy job as they grapple with a raft of innovations, not least blockchain and cryptocurrencies. The CSSF acknowledged that blockchain “like any other innovation, can bring advantages and opportunities to the financial sector.” However, it noted that these sorts of “evolving technology-based innovation” present a challenge for regulators.
The CSSF emphasized that it was not endorsing the use of blockchain but outlined three examples of use cases. These include KYC, where one provider can verify a person’s identity and share that verification with other organizations via blockchain. This avoids the need for individuals to go through verification multiple times.
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