- The central bank of Lithuania initiates discussion on cryptocurrency between banks, regulators, and traders.
- The country would issue quick and cheap licenses for ICOs to operate.
Lithuania: Yesterday 15th April, a local news channel, The Baltic Times, reported that the Lietuvos bankas, the central bank of Lithuania, has begun considering digital currencies, and has initiated a dialogue on cryptocurrency between commercial banks, financial regulators, and cryptocurrency traders.
According to the fintech strategy coordinator of Lietuvos bankas, Jekaterina Govina, the bank had invited delegates from the banking sector, finance ministry, the Financial Crime Investigation Service (FNTT), and the Initial Coin Offering (ICO) sector to a recent crypto roundtable.
Jekaterina states that irrespective of the risks associated with digital currencies, “blind denial, reluctance to understand and to work with the cryptocurrency world leads nowhere.” He continued:
“It’s necessary that banks speak to those who have carried out an ICO or those who convert cryptocurrencies into conventional money. A dialog has been established and it remains to be seen where it will lead us.”
The bank had last year October issued a document detailing its stand towards Initial Coin Offerings and digital currencies. The document states that financial services activities should be separated from those activities associated with digital currencies. And that financial market participants (FMP) when offering financial services to clients who engage in activities associated with digital currencies should manage the possibilities of money laundering and terrorist financing.
The news channel added that though central bank Lithuania needs a “clear separation” between traditional financial services and cryptocurrency-related activities, the bank will “issue licenses cheaply and quickly” – evidently for Initial Coin Offerings – and also accept license applications in English, as part of its goal to become a “European fintech hub”.
One of the board member at Blockchain Center Vilnius, Vytautas Kaseta, made it known that a major problem for cryptocurrency-related business in the country is the difficulty of working with banks. He said:
“Commercial banks don’t understand the nature of the crypto-business and the business model. Therefore, they regard it as a high-risk business and require additional proofs of the origin of money and investment, and often refuse to open accounts for companies.”
However, the Lithuanian Banks’ Association (LBA) responded that although a dialogue on cryptocurrency is required, yet the likelihood for cryptocurrency to play a role in illegal activities means that there is a need for proof of a customer’s source of funds:
“We are interested in speaking to everyone to better understand each other’s business models, but consumer protection, money laundering and terrorist financing prevention is a priority that must be ensured. We understand from the meeting that some of cryptocurrency market participants cannot say where the money comes from. This is a serious problem, and they didn’t realize it was a problem.”
With this step, Lithuania is becoming one of the few countries who accept cryptocurrency. What do you think about this? Tell us in the comment box.