The potentially disruptive power of blockchain - a distributed ledger to record all transactions in a format that is checked and authenticated by participants - has been the hottest discussion topic in financial services in recent years. 

Luxembourg benefits from pioneering private sector blockchain initiatives as well as the country´s efforts to build a national blockchain infrastructure. As the largest investment funds centre in Europe, Luxembourg is taking the driving seat to build a European blockchain infrastructure to ensure the sector can leverage Its full potential.

Luxembourg completes first live blockchain transaction

Last year FundsDLT, a collaboration between Fundsquare (a subsidiary of the Luxembourg Stock Exchange), InTech (a subsidiary of POST Group) and KPMG Luxembourg, launched a new blockchain-based digital fund distribution platform for asset managers. Natixis Asset Management, a leading affiliate of Natixis Global Asset Management, became the first company to test the platform when its investors successfully purchased shares in its funds through the FundsDLT platform. This transaction became the first real blockchain transaction in the history of investment funds

Blockchain powered platform for asset manager

The group decided early on in 2016 to develop the first prototype – a tool that can manage the entire process of fund distribution by bringing closer together and inter connecting the various actors of the fund industry: distributors, transfer agents, asset managers, custodians, cash clearers as well as functions such as shared KYC repository.

Olivier Portenseigne

Managing Director & CCO, Fundsquare

The aim is to use Distributed Ledger Technology and SmartContracts to automate processes and thus reduce the need for reconciliations and increase transaction speed. Blockchain will also provide us with a toolbox to address certain issues in the fund industry.

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LEO, October 2017

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