Сryptocurrency Regulation in Luxembourg

In an attempt to live up to its reputation as a major fintech hub, Luxembourg has recently passed a law whereby it’s now possible to transfer & hold virtual assets through DLT in the Grand Duchy of Luxembourg. The country is also the 1st in Europe to have enacted legislation authorizing the obtaining of a license for a payment institution.

Payment Institution License

No registration or authorization is required for issuing virtual currencies in the Grand Duchy of Luxembourg; however, a payment institution license is required for providing digital currency transfer services in the Grand Duchy of Luxembourg.

Regulation of cryptoasset exchange platforms in the Grand Duchy of Luxembourg is something that the CSSF, Luxembourg’s number one financial regulator, has been pushing for for many years. According to it, the following activities must be classified as financial ones:

• issue of payment instruments in cryptocurrencies in the Grand Duchy of Luxembourg;
• using cryptocurrencies to provide payment services in the Grand Duchy of Luxembourg;
• launching platforms to trade in cryptocurrencies in the Grand Duchy of Luxembourg. 

Individuals seeking to engage in any of the above activities must get a payment institution license in the Grand Duchy of Luxembourg.

ICO

Those looking to launch an ICO in Luxembourg should remember that the country has no laws regulating ICOs or cryptocurrency exchanges. Certain legal provisions & supervisory requirements are used as a basis for regulation of ICO & cryptocurrency exchanges in Luxembourg.

Conclusion

Launching an ICO in the Grand Duchy of Luxembourg compliance with very strict AML/CTF rules & regulations. And even though this jurisdiction doesn’t yet have any laws regulating ICOs, businessmen interested in establishing a cryptocurrency exchange in Luxembourg can expect it to become a major international fintech hub.