2026-06-16

143. Deputy Shay Brennan asked the Minister for Enterprise, Tourism and Employment to outline any assessment his Department has undertaken of the need to update company law to facilitate the greater use of distributed ledger technology for the tokenisation of funds set up as Irish companies; and if he will make a statement on the matter. [45470/26]

Ireland's funds industry manages trillions in assets and supports over 20,000 jobs. It is one of our most significant internationally traded sectors. Globally this sector is now moving rapidly towards tokenisation and the use of distributed ledger technology. Will the Minister advise what assessment the Department has undertaken of whether our company law framework, including the Companies Act 2014, ICAP and the Investment Limited Partnerships Act are fit for purpose to support this transformation?

I thank Deputy Brennan for his question on a very important sector for the Irish economy. Tokenisation, the process whereby an underlying asset or pool of assets, tangible or intangible, is converted into digital tokens that act as its proxy, could fundamentally reform how capital markets operate, enabling real-time trades, increasing transparency and liquidity, expediting clearing and ultimately providing for atomic settlement. As the Deputy is aware, the Minister for Finance, who has lead policy responsibility for this area, published a funds sector 2030 report in October 2024. The report, titled Funds Sector 2030: A Framework for Open, Resilient and Developing Markets, is a wide-ranging review of the funds and asset management sector. The report included a recommendation that the industry continue to engage with the Central Bank of Ireland and the Department of Finance, as necessary, "with a view to mapping out a pathway for adoption of tokenisation". I am advised that the Department of Finance fully supports and encourages the work that industry has undertaken thus far to assess what can be done within the current legislative and regulatory frameworks. Officials from that Department are considering submissions from industry regarding proposed changes to the current legislative framework. This work is being done and led by that Department, and following this work my Department will examine any proposed legislative amendments to the Companies Act put forward by the Department of Finance, as is the current practice in the normal course of events. This is in tandem with other work involving negotiations by the Department of Finance as policy lead in this area, such as work at EU level involving financial services regulation. The Deputy may also be aware that, in line with recommendation 17 of the report, the Central Bank published a discussion paper on tokenisation last March, with submissions being invited by 5 June. I understand the intention now is for the Central Bank to publish a feedback statement following this consultation period.

I thank the Minister. He will appreciate there is an urgency about this issue. The core requirement from the funds industry is quite narrow. It is recognition that distributed ledger technology is a valid medium for share issuance for transfer, registration and record keeping. No radical change is being sought, just some targeted non-technology-focused amendments to key relevant Acts. Major international asset managers are already launching tokenised fund products, particularly in the money market funds where Ireland is Europe's leading domicile. Is the Department aware of what legislative changes need to be implemented and of the urgency with which clarity needs to be communicated to fund managers? Is the Minister actively considering legislative changes at this time, and if so, over what timeframe?

I am very much aware of how important the funds sector is to our employment landscape. Over 60,000 jobs and, as the Deputy pointed out, trillions in assets are domiciled here. As I said, the Department of Finance has the lead policy responsibility for the area. Distributed ledger technology, as the Deputy pointed out, provides a game changer for the sector. It records transactions, and transactions that are recorded in multiple places at the same time. This can provide a huge opportunity for Ireland. What is happening here now is that submissions have been sought. They have been coming into the Central Bank. The Department of Finance will communicate to our Department what changes are needed in the company law code, because our Department is responsible for this area. We will support the growth of the sector in that regard because we have seen how much it has contributed to our economy in terms of jobs and this being a highly regulated sector that has a pathway into the European market that is significant for Ireland. I can, therefore, assure the Deputy of my full attention to this matter.

The Minister will appreciate that the risk here is a straightforward competitiveness one. If competing jurisdictions provide clearer legal certainty first, the product development and the jobs that go with it will go elsewhere. The question is not whether tokenisation or distributed ledger technology will become a core component of the funds industry, but whether Ireland will be ready in time to maintain its leading global position in the funds sector. Our reputation in financial services was largely built on anticipating market developments and rapidly adapting to them. Does the Minister accept that timely action on this issue is necessary and will he commit to engaging with industry stakeholders on specific legislative amendments that have been identified and other requirements that would support the industry?

I am constantly engaging with stakeholders. Indeed, I meet many of them during my weekly business with the Department. I have had some very exciting job announcements in the financial services sector and have discussed this issue in detail with it and in relation to the work the Department of Finance has undertaken. It has been present for some of those announcements, so we are very much aware of the opportunity here. Ireland will absolutely be at the forefront to grasp that opportunity with both hands. I should also point out the highly skilled workforce we have and the capacity to ensure that grows is so important for the sector as well. We are well set, therefore, to grow it further. The IDA has a number of exciting companies growing in this space. There is also our own fintech sector with Fenergo and others that have grown exponentially in recent years. I assure the Deputy of my full attention, and I am working closely with the Department of Finance and the Central Bank on this issue.