The CSSF has published a white paper setting out technological risks and recommendations for the financial sector regarding blockchain and distributed ledger technology (DLT).

The regulator says use cases can include, in KYC data management, to confirm identity claims through cryptographic proof. It can also be used for improving the speed and security of payments and fund transfers, and for distribution platforms involving tokenization of investment funds that enable investors to subscribe and redeem fund shares or units through a web or mobile application.

However, the CSSF points out that risks can include governance issues, regulatory requirements, the ability to comply with judicial decisions, and legal certainty over blockchain technology and smart contracts.

The CSSF white paper on blockchain and DLT is available here.