“Middle-of-the-road strategy”, “attractive but not more than other countries”, and divided between FOMO and conservative: respondents to the Infrachain Blockchain survey did not mince their words.
Digital strategies
The report, which was commissioned by Luxembourg’s government department of media, connectivity and digital policy and published on Thursday, drew on the views of individuals from 46 organisations in Luxembourg.
Over 70% of the bodies polled had adopted blockchain technologies either as the core of their activity or as one technology used among others. And for three-quarters of respondents blockchain technology was part of their corporate digital strategy. A fifth of respondents said that they were considering cryptocurrencies, for instance, to accept payments. Cryptoassets, meanwhile, featured in the digital strategies of 62% of respondents and of that segment, half said that they planned to issue bonds or shares on blockchain.
Luxembourg 3rd highest per capita ratio of blockchain operators
According to a 2020 EU Blockchain Observatory and Forum report, Luxembourg ranks third in Europe for the per capita ratio of blockchain players with just under 8 companies per 100,000 residents, after Malta and Estonia. The majority are found within financial, legal, research and education, the public sector, tokenisation, IT, and business services. A quarter of the survey respondents were composed of large companies and SMEs, respectively, with private institutions making up one-fifth. The majority were convinced of the competitive edge that blockchain offers. The conviction declined slightly for crypto assets and even further for cryptocurrencies.
Respondents speak frankly
“It’s attractive but not more than other countries,” one anonymous respondent wrote. Another responded that the financial sector was “very much divided between the fear of missing out and more conservative and skeptical views about the technology.”
They continued by saying that Luxembourg has adopted “a half-hearted, middle-of-the-road strategy which may hamper some hard-core blockchain-related fintech projects, but is definitely open to other projects […], in which the blockchain technology, while required, does not play a central role.”
Regulatory certainty and funding
Almost three-quarters of respondents said that Luxembourg needed regulatory measures to make the country more attractive for blockchain technology, digital assets and cryptocurrencies. At the same time, half identified funding as a key component. Regulatory clarity would, the report says, provide clarity and guidance for the financial sector and should extend existing blockchain laws to include more asset classes and types of instruments.
Respondents said that seed financing opportunities should be increased and funding targeted at blockchain projects, in particular those that are aligned with national strategies. Lastly, the report concluded that there was a lack of VCs ready to invest in blockchain projects.
