Liechtenstein aiming at regulating DLT in 2019
Liechtenstein has already established itself as a pioneering jurisdiction in the blockchain space as Crown Prince Alois has ensured cryptocurrency entrepreneurs are welcome. Could you briefly outline how far Liechtenstein has come in adopting a regulation designed for blockchain and DLT?
The government of Liechtenstein will introduce new legislation to regulate DLT business models in 2019. The bill will be presented this summer. The regulatory environment is not yet tailored to FinTech business models. Only few business models using DL technology are currently covered by special licensing requirements. The new legislation will provide legal and regulatory certainty for businesses and customers alike, making Liechtenstein one of the first nations worldwide to regulate this topic so comprehensively, laying the groundwork for extensive economic applications.
Looking forward, in Malta, banks have so far been reluctant to allow any transactions to or from platforms handling cryptocurrencies due to fear of consequences with international banking relations, do you envisage these positions to change among financial institutions in the upcoming two years?
Predictions surely are hard to make in such a dynamic environment. However, technologies such as blockchain have the potential to change our lives decisively, even apart from cryptocurrencies. In my opinion, new financial technologies are leading to a transfer of risk toward the client. New technologies enable new business models that can only be captured partially in regulatory terms today and that entail new risks. Regulatory projects in Liechtenstein and Europe will address these issues and ensure that client protection is maintained. This will help to restore trust in new business models of both clients and the banking sector.
Ideally, what are the most important pillars of a proper blockchain and DLT regulation in your view?
Regulation has to provide legal and regulatory certainty for businesses, ensure that client protection is upheld, that trust in the financial market is maintained, and that the stability of the financial system is not put at risk. We are confident that Liechtenstein’s new legislation concerning DLT will take all these aspects into account.