In light of the recent blockchain law proposal, founder and CEO of Moniflo, Georges Bock, shares his views on the potential of distributed ledger technology (DLT) in transforming capital market infrastructure.
Luxembourg’s finance ministry in July proposed the groundbreaking Blockchain Bill IV which would allow the use of blockchain technology in investment funds. As Investment Officer reported following the announcement, not only would this set new standards in the industry, but it would further boost Luxembourg’s position on the global finance scene.
Georges Bock is among the experts who have praised the proposal. The founder and CEO of Moniflo—a values-based investment platform with a strong ESG focus—said in a recent interview that the legislation would bring a new level of accuracy and transparency in transactions.
DLT at its cornerstone
Run by the legal entity invesTRe, Moniflo launched its app in February after raising €3 million in equity the previous month. As Bock noted, the vision of invesTRe aligns with this fourth blockchain proposal, which he said will be a “major push” for the future of capital market infrastructure.
“Right now, capital markets are still largely inefficient. Smaller transactions are extremely expensive, and that can be solved with DLT,” Bock added. “Our vision is to contribute to make DLT the cornerstone of capital market infrastructure when it comes to financial securities transactions.”
Moniflo chose first to go for UCITs retail, bringing DLT to this market through its platform, allowing its users to invest without account, transaction or custody fees. “That’s only possible if you use modern technology because you have to dramatically reduce costs, and DLT definitely helps with this,” Bock explained. The outfit is aiming in future for further retailization of alternatives; without DLT, Bock said that would be hard to achieve in terms of efficiency, speed and costs.
Opportunities for the industry
The blockchain proposal also establishes the new optional “control agent” role which, as Investment Officer previously reported, would be “to ensure that the use of DLT in managing securities is secure, transparent, and compliant with legal standards”.
Bock praised this aspect in terms of how it should streamline reconciliation processes. “This new law will allow one single record, shared by everybody, confirmed a priori… it means we can now have the entire value chain as DLT whereas before that, the issuer side was a little bit shaky.”
Bock sees real opportunity, particularly in the AIF and ELTIF space, and highlighted the need for affordable investment products and the potential of blockchain technology to democratize investments, i.e., in the private equity space.
Above all, he applauded Luxembourg’s move: “Here the lawmakers have really understood the missing pieces of the puzzle, and that can become a breath of oxygen for the industry over the next 5 to 10 years.”
The Moniflo app currently boasts around 10,000 downloads, with over 1,000 on the onboarding track, according to Bock.