3FOOD

Third Industrial Revolution Consulting Group
companies incorporated there. This is intended to allow for automatic, interoperable updating
of underlying shareholder registry data, cutting back significantly on the record-keeping burden
for startups and other private companies that must maintain ever- changing capital tables in
preparation for public listing.
Extending these ideas further, Luxembourg could also trial the use of blockchain-based voting
for specific initiatives. Just as the Blockchain prevents double-spending of currency, it can also
prevent double-voting, potentially allow for seamless, digital and even smartphone-based
voting systems in which the citizenry can enjoy both ease of use and a high degree of trust. An
early application could apply in the private realm of shareholder votes, but trials of this voting
model could also be developed for municipal budget items and even national referendums.
This auditability feature of the Blockchain can also be applied to many of Luxembourg’s existing
industries, as well as to the Luxembourg Financial Working Group’s various projects. In an era of
greater demand for transparency -- with new EU requirements for disclosing bank clients’ tax
records, for example -- blockchain-anchored audits will help the Grand Duchy stand out from
other states as a home of responsible, accountable governance. As mentioned previously, it can
help maintain trust in the proposed data vault and can be applied to the government’s plans to
expand robo-advice services by ensuring that investment algorithms aren’t tampered with. It
can also improve the integrity of the underlying data upon which Luxembourg’s giant asset
managers depend for the pricing of new and existing asset classes. Blockchain-based audits will
also be vital to the administration of green bonds, a core element of the FWG’s plan to finance
the expansion of renewable energy and carbon-saving projects, as discussed below.
2.3 Tokenization
It is possible to issue a token on the blockchain that represents a real world security like a stock,
bond, title, deed, or even a certificate of authenticity and which can be moved between
accounts in that setting. In capital markets, its promise lies in real-time, seamless post-trade
clearing and settlement, as well as in migrating custodial services from an expensive process of
physical asset security to one of automated, software-backed security. The costs of maintaining
the current, intermediary-dominated system are significant, not only in the fees paid to these
institutions or the long, multi-day delays in concluding transactions but more importantly in the
hundreds of billions of dollars tied up in collateral and withheld capital. Unlocking those funds
will speed up transactions and release liquidity into markets that have been starved for it since
the financial crisis-- as Luxembourg’s asset managers know too well. Meanwhile, if property
titles are validated and transferred through this means, the provenance can be proven in realtime,
with a clear, immutable record of ownership, liens and other attachments. This can
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