The Central Bank of Lithuania said in an announcement released earlier this month that it has updated its position on cryptocurrencies and initial coin offerings (ICO) to reflect the current market realities.
The new document will now serve as an upgrade on the earlier regulation which the banking Supremo released in 2017, and “ensure a level playing field for all financial market participants” hoping to get involved with the new industry.
Keypoints From Updated Crypto and ICO Regulation in Lithuania
The new regulation emulated a development we reported in Japan by replacing the phrase “virtual currency” in the earlier regulations to “virtual assets.”
The updated position prohibits Financial market participants from participating in or providing services related to virtual assets.
It also prohibits Financial market participants from receiving payments in virtual assets. However, they can employ a third-party to help them retrieve the funds and convert to the native currency.
For the first time, the Central Bank of Lithuania is allowing financial market participants to offer cryptocurrency investment funds to their professional clients, citing that such funds are already prevalent in other countries.
Financial market participants will not participate in virtual asset loan services. They are not allowed to hold a client’s virtual assets as collateral or with the obligation of paying interest after a particular period except in a case where the assets are “security tokens.”
The Central Bank promised to review their position from time to time, with the objective of making amendments that reflect current market realities.
Since the turn of the year, efforts to regulate the cryptocurrency and ICO industry have intensified in several regions who had once criticized its authenticity.
Stmarket.co has within the last few months reported ongoing crypto regulation efforts in Cyprus, South Africa, Ghana, India, UAE, Belarus, Philippines, and the U.S. Industry participants hope that these regulatory efforts will, in the long run, fuel mainstream adoption of cryptocurrencies and allow the realization of its potential.
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