Bill 7363 was passed with almost unanimous approval as only two out of 60 lawmakers voted against the bill.
The new legal framework will grant blockchain-based transactions the same legal status as traditional ones, according to local news outlet the Luxembourg Times.
Talking to the Luxembourg Times last year, the country’s Finance Minister Pierre Gramegna said: “The goal is to make sure that, if you do transactions using blockchain, you have legal certainty and the same legal strength as if you had done the same transaction without using blockchain, in a traditional manner.”
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With this move, Luxembourg has joined the handful of European Union countries with a legal framework for the blockchain ecosystem.
In March 2018, the Luxembourg Financial Regulator CSSF issued a warning against investments in cryptocurrencies and initial coin offerings (ICOs) to warn investors against the volatile market of digital currencies. The warning stressed on the shady business practices of various blockchain firms as they are not entirely transparent with incomprehensible business models. The regulator also noted that Luxembourg’s central bank does not consider cryptocurrencies as legal tender.
Despite being one of the Financial hubs in Europe, the country has a very low crypto penetration with only four percent of Luxembourg’s population owning cryptocurrencies, according to a 2018 survey by Ipsos.