Tokenisation has served as the “acceptable face” of blockchain, with its association with cryptocurrency, with its slightly tawdry reputation. While critics say that using blockchain over a simpler tech solution involves spending unnecessary money, time and effort, others say it opens up interesting possibilities and can actually bring you benefits. Many innovative companies embed the technology in their business plan. Luxembourg has made a tremendous push in this area, including introducing new supportive legislation.
Nasir Zubairi of LHoFT podcast interview
Our top story primarily focused on tokenisation was our podcast and related story based on our interview with Nasir Zubairi, the CEO of the Luxembourg House of Financial Technology, or LHoFT. Surprisingly for a man in charge of such an organisation, Zubairi takes a very sceptical view on the latest claims for technology – NFTs, the Multiverse etc. He sees these as being driven primarily by marketing budgets. Despite this, he still has time for tokenisation.
He says that some in the financial sector still have misconceptions about tokenisation and blockchain, when he says that, properly used tokenisation can eradicate money laundering as well as create efficiencies and lower costs in the back office. Even private equity is benefiting, he said, from technologies allowing better consolidation that will allow investment managers to serve their investors better, if only they would use it more.
EIB issues blockchain-backed bond
Our story about a new digital bond taking advantage of the latest developments in Luxembourg legislation on virtual assets also got a lot of attention. The story featured our interview with the Allen & Overy team structuring the legal aspects of the bond. One of the partners involved described the deal as “super-important for Luxembourg”, as it featured Luxembourg-based partners as lead counsel, something that is “truly rare these days”.
The new Luxembourg law allows the issue of tokens of securities in a native fashion, directly on the blockchain. It’s also possible to hold and settle securities and ensure servicing in the blockchain, making it possible to have “an entire lifecycle” under Luxembourg law. In the partners’ view, Luxembourg is ahead of even the United States in this regard.
BlocHome offers alternative home ownership approach
In our first in-depth look at BlocHome, we described how BlocHome is leveraging the tokenisation ability of blockchain to divide “shares” in homes and apartments in Luxembourg. . It’s using blockchain and tokenisation as a secure way to transfer property and ownership digitally, with no intermediary.
The main idea is to allow people to get into real estate investing at lower levels of expense – with a minimum expense of 1,000 euros. The company has already financed the acquisition of a residential apartment building in Cessange, allowing their investors to start owning some actual real estate. The firm’s long-term vision is to allow “housing as a service”, where a BlocHome member can get accommodation in line with their housing need.