Blockchain technology is expected to boost Luxembourg’s GDP by 2.5% and create 6,600 new jobs by 2030. Is it prepared for the associated challenges? The Luxembourg Blockchain is not convinced.
In addition to these benefits, the Luxembourg Blockchain Lab is warning of the need to prepare for the disruption this technology will bring.
In a list of recently published government policy recommendations, it writes: “Luxembourg needs rot be prepared for the challenges raised by blockchain and to reap the benefits.”
DLT developments could supercede core activities in Luxembourg industries, particularly finance.
“Luxembourg needs to take the lead for its own future competitiveness. The goal of Luxembourg is to be a leading digital nation; a focused blockchain strategy will significantly advance this goal,” it writes.
Its 19 recommendations highlight the need for clear political support to drive upcoming transformation in the financial industry. Specifically it wants an “initiative anchored at the highest level of government, inspired by Blockchain4Belgium.
It writes: “All public authorities should proactively present legal and regulatory recommendations and investigate the use of blockchain to increase the global economic competitiveness of Luxembourg and the wellbeing of its citizens.”
Support measures
The Lab wants the government to create new support mechanisms aimed at blockchain projects, which may not fit into existing schemes. “Support measures help attract and develop new activities and talent.”
Banking access
And it stresses the importance of providing financial access to DLT companies, pointing out that DLT and digital innovation startups have difficulties opening bank accounts. It writes: “A last resort solution needs to be provided or a specific agreement with one or two financial institutions should be guaranteed.”
Testbeds & cryptocurrencies
Other suggestions examine the creation of a secure environment that would grant private sector players access to the public sector blockchain and providing testbeds.
With Luxembourg companies already accepting payment in cryptocurrencies pegged to the US dollar, preparation for cryptocurrencies is critical. The Lab wants Luxembourg to prepare to accept payment in Digital Euro and companies that use it should be able to pay VAT in this new currency.
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