LHOFT

An American early-stage fintech named Pontoro recently pitched in Luxembourg its development of an innovative new digital assets platform that makes infrstructure investments more liquid, and thus less difficult to finance.

With its DLT white paper released in January, supervisor CSSF has triggered a broad industry debate on the use blockchain technology to adopt virtual assets, and about public versus private blockchains. The discussion is seen as positive, and, according to one industry expert, could pave the way “for mass adoption of asset tokenisation”.

The popularity of digital assets will lead to significant changes for the financial industry, including within the area of asset custody. Today’s global custody industry goes back to regulatory changes in the 1970s. Digital assets, the most well-known being Bitcoin, differ in several ways from traditional assets, including the role of information technology, specifically of private key management, which will be accompanied by potential regulatory differences.

There’s a strong level of interest in crypto finance in Luxembourg’s financial centre, according to a survey carried out by the Luxembourg House of Financial Technology and PwC. The Grand Duchy nevertheless has yet to develop the necessary infrastructure to be a leading crypto finance centre.

The survey, entitled “Crypto-assets: Paradigm shift or short-term trend?” was carried out in the last quarter of 2021 and was presented on Wednesday at a Luxembourg event hosted by PwC.