Summary
This report outlines the technical and legal aspects of incorporating Digital Ledger Technology (DLT) in the financial industry, specifically focusing on tokenisation. It discusses the limitations of traditional securities registers and how DLT can address these issues by providing enhanced transparency, efficiency, and security. The report emphasizes the importance of real-time monitoring of securities ownership, which reduces human errors and fraud, and facilitates easier participation for smaller investors. It also highlights the challenges to universal DLT adoption, including standardisation, education, and collaboration among stakeholders. The document aims to equip financial institutions with the necessary knowledge to implement DLT in securities registers, thereby transforming securities management and creating new opportunities in the financial market. Furthermore, it details the role of smart contracts and whitelisting mechanisms in ensuring compliance and enhancing the security of digital securities. Overall, the report serves as a comprehensive guide for understanding the implications of tokenisation in Luxembourg's financial landscape.
