Luxembourg is moving to remove key barriers to tokenised fund adoption, as new regulatory clarifications enable both crypto exposure and more efficient settlement mechanisms within UCITS frameworks.
Speaking during the Next level competitiveness: Luxembourg regulatory highlights panel, Raoul Heinen, partner at Linklaters, pointed to two recent updates from the Commission de Surveillance du Secteur Financier (CSSF) that signal a shift towards practical implementation.
The first allows UCITS to gain indirect exposure to crypto assets, up to 10% of their NAV, via transferable securities.
“This can enhance diversification within portfolios and gives asset managers more flexibility… it’s something the market has been requesting for some time,” said Heinen.
A second clarification permits UCITS, for the first time, to hold e-money tokens for the purpose of facilitating subscriptions and redemptions.
Heinen noted that this is particularly relevant for tokenised funds, where more automated settlement processes can reduce reliance on traditional payment rails.
“The main advantage comes in the context of tokenised funds… it helps unlock the full potential,” he said.
The developments suggest Luxembourg is moving towards enabling the infrastructure required for tokenised finance to scale.
