Blockchain technology which is used to create cryptocurrencies is not new in Luxembourg, the number of financial companies using it having increased significantly in the past year. What is new is the first share purchase completed through a fund distribution platform created be using blockchain technology. Our lawyers in Luxembourg can assist foreign investors interested in starting a fintech business in the Grand Duchy.
The new platform enabled fund managers to buy shares issued with the use of blockchain technology on behalf of the investors. This was the first blockchain transaction in the global investment fund industry. What should be noticed is that the shares were purchased with real money and not digital ones.
This was the beginning of new distribution platforms through which asset managers will be able to sell financial instruments issued by investment funds. The most important advantages of this technology are the low administration costs and transaction processing times which were significantly reduced.
Down the line, blockchain will be used to further streamline additional parts of the fund administration process. Our law firm in Luxembourg can assist investors who want to open investment funds in this country.
The model used in this first transaction is expected to be soon implemented in other activities outside the investment funds industry. Business to business (B2B) and businesses to customer (B2C) transactions are the next challenges for fintech companies in Luxembourg which want to use blockchain to offer secure transactions.
Luxembourg is the most important investment fund center in Europe and the second worldwide and is now trying to consolidate its position as a global financial technology hub by offering a wide range of digital services to fund and asset managers.
The government also supports this initiative, as it has recently launched an incubation center through which fintech startups are encouraged to set up their activities in Luxembourg.
Our Luxembourg lawyers can help you open a fintech company here, so please feel free to contact us if you need assistance.
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