- Luxembourg issued $54 million in digital Treasury notes using distributed ledger technology (DLT).
- The digital notes are native to the blockchain and will be listed on the Luxembourg Stock Exchange.
- The issuance was led by HSBC Continental Europe and BGL BNP Paribas, with strong investor interest.
- Luxembourg continues to lead in legal frameworks for blockchain-based securities.
- The country’s updated laws support direct blockchain-based ownership and new account-keeping models.
On June 11, the Luxembourg State Treasury issued $54 million in digital Treasury notes using the HSBC Orion distributed ledger technology (DLT) platform. The securities, set for listing on the Luxembourg Stock Exchange, are the latest example of native digital bonds that only exist on a blockchain.
The new zero-coupon notes were sold at 99.03% of their face value and are redeemable at par in six months. Similar projects have taken place in other European countries, with Slovenia issuing a $32 million bond via DLT in July 2023. HSBC Continental Europe and BGL BNP Paribas served as lead managers. According to Luxembourg’s Ministry of Finance, “The issuance of digital cash certificates (CTD) underlines our commitment to remain at the forefront of technology in terms of financial infrastructure. It illustrates the innovative strength of our financial center.”
A key feature of this issuance is its digital-native structure, meaning the bond only exists on blockchain, rather than as a digital version of a traditional asset. In the statement, the Ministry highlighted “significant investor interest.” The platform used, HSBC Orion, operates under Luxembourg law and is also linked to Hong Kong’s central securities depository, though it runs as a separate network.
Luxembourg has worked to make its legal frameworks suitable for blockchain innovation. The country passed its first blockchain law in 2019 and has continued to update its regulations. Rather than use a traditional central securities depository, Luxembourg law enables a “central account keeper” model where custodians can manage accounts directly. HSBC has been approved to act as a central account keeper, managing this digital note issuance.
A recent law, passed in December 2024, furthers this approach. It facilitates blockchain-based securities that investors can hold in digital wallets, moving away from traditional custody systems. The law borrows ideas from Germany’s eWpG framework and introduces a “single control agent” to handle issuance accounts and securities tracking.
HSBC Orion’s Luxembourg hub follows a trend of European digital bonds selecting Luxembourg law for legal certainty. Most European digital funds also employ similar frameworks. Two European Investment Bank bonds have previously been issued using Luxembourg law.
These developments are expected to support Luxembourg’s ongoing role as a leading venue for blockchain-based and digital asset issuances in Europe.
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