Knowledgebase

Cryptocurrency Regulations in Luxembourg

Cryptocurrencies: Not legal tender
Cryptocurrency exchanges: Legal, must register with the CSSF

There are no specific cryptocurrency regulations in Luxembourg but the government’s legislative attitude towards them is generally progressive. Although not legal tender, Finance Minister Pierre Gramegna, has commented that given their widespread use cryptocurrencies should be “accepted as a means of payment for good and services”. In August 2018, authorities issued advice on the tax treatment of cryptocurrencies which, in a business context, depends on the type of transaction involved.

Cryptocurrency regulations Luxembourg

Exchanges

Cryptocurrency exchanges in Luxembourg are regulated by the Commission de Surveillance du Secteur Financier (CSSF), and new crypto businesses must obtain a payments institutions license if they wish to begin trading. Licenses involve AML/CFT reporting obligations under Luxembourg’s “electronic money” statutes. The first license was granted in 2016 to Bitstamp which trades in a range of currencies, including USD, EUR, bitcoin, and ethereum – and passports into EU member-states.

Future Regulation

Although there are no specific legislative steps on the radar, in March 2018 the CSSF issued a warning about the volatility of cryptocurrencies, their vulnerability to crime, and the associated risks of investing in ICOs. Luxembourg’s progressive approach to crypto looks set to continue however, in 2017 the CSSF acknowledged the financial benefits of blockchain technology and Pierre Gramegna has spoken of the “added value and efficient services” that cryptocurrencies bring.

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