Allen & Overy

Luxembourg has proposed a groundbreaking law enabling the use of blockchain technology in investment funds, aiming to solidify its position as a global financial leader.

The European Investment Bank has issued its first natively digital bond denominated in British pounds. The EIB raised 50 million with the bond, which has a duration of two years and bears a floating rate of interest.

BNP Paribas, HSBC and RBC Capital Markets are the joint lead managers. The syndicate was advised by Allen & Overy. EIB was advised by Clifford Chance.

Developments in Luxembourg legislation have enabled the European Investment Bank, the EIB, to issue for the first time a digital bond under Luxembourg law. In a project codenamed Project Venus, the EIB this week raised 100 million euro by issuing a blockchain-based bond in cooperation with the central banks of France and Luxembourg and backed by a deal team working in five countries.

Public registers in Luxembourg, the Netherlands, Austria as well as other EU countries set up under EU laws to fight money-laundering and tax evasion remain temporarily closed as legal specialists agreed that the ruling effectively shut down a key aspect of the EU’s fifth anti-money laundering directive. National governments as well as the EU are still considering next steps.

Recent moves by the UK and Luxembourg authorities regarding investment funds should allow business to continue mostly as normal despite Brexit, says Patrick Mischo, newly appointed Senior Partner of the law firm Allen & Overy in Luxembourg.