On the 14 of February 2019, the Bank of Lithuania through its board of management issued new principles for the crypto sector. Although the new policies don’t change the laws previously put in place, it’s opening some areas previously shut by the document released in 2017 October.
While the previously released document was defining the country’s position in regards to digital coins and IOCs the new document is doing the same. In the recently released principles, Lietuvos Bankas has replaced the primary term used to refer to crypto from virtual currency to virtual assets. The new change also comes with some changes targeting the financial market participants (FMPs). In a bid to level the playing ground, the new principles will impose strict rules for the sector. FMPs now have clear-cut lines when they can make transactions in virtual assets.
Institutions to Separate Their Core Business Operations from Virtual Assets
While the previous documents required industry players to separate their core business operations from those related to crypto, the newer principles are just cementing policies already in place. But in the recent documents, the financial institutions have some wiggle room which enables them to process payments in crypto. The new directive gives the organizations the power to receive payment in digital coins directly but through a third party. Through the third-party platform, the organizations evade all the risks that come with virtual currency by receiving cash only in fiat.
Further on, when it comes to Initial Coin Offering the new documents also touched on some issues from this sector. And through rules and regulations governing Lithuania equity, ICOs will now be available at crowdfunding platforms and security tokens can also be issued. But before the firm can float the securities on the public domain, they must comply with the EU directives already in place.
In a bid to attract more entities, the Lithuanian bank has put measures in place to cater for the registration of investment funds in the digital assets space. But before they can launch their services, they must comply with banking laws in place. Furthermore, the firms will be required to provide their services only to professional investors.
As a country, Lithuania is crafting rules and regulations to attract more investors and firms into its country by providing a conducive environment. And at its current pace, it’s heading in the right direction.