The Central Bank of Lithuania has recently updated its policies on cryptocurrencies and initial coin offerings (ICOs), effectively allowing cryptocurrency-based investment funds to operate in the country.
According to Finance Magnates, the central bank has reportedly attempted to give financial market participants (FMPs) a “level playing field” when looking into the nascent industry. The Bank of Lithuania has now established that FMPs can launch investment funds for “virtual assets,” and has created parameters for how and when these assets can be used as a payment method.
The documents read:
Taking into account current market developments and evolving regulatory regimes as well as seeking to ensure a level playing field for all financial market participants, the Board of the Bank of Lithuania has updated its position on virtual assets and initial coin offering[s].
The central bank’s new policy means professional investors can create funds for digital assets, and that private companies can receive cryptocurrency payments processed by third-party exchanges, that turn them into local fiat currency.
It notes, however, that FMPs can’t accept digital assets if they’re then required to repay them, with or without interest. They’re also prohibited from issuing cryptocurrency-based loans, or from accepting virtual assets as collateral, unless they’re legally seen as securities.
Per the central bank, FMP should still attempt to separate their traditional financial activities from those related to virtual assets. They should, in fact, not provide services related to the cryptocurrency industry.
Crypto Growing in Lithuania
In Lithuania, the cryptocurrency scene has notably been growing. Recently, cryptocurrency wallet provider Blockchain.com opened offices in the country, and the amount raised by ICOs based in the country has kept on growing.
According to the report, it may have been behind Lithuania’s recent move, as the country saw a need for tougher anti-fraud measures with the growing popularity of the fundraising practice. As CryptoGlobe covered, in April of last year the central bank initiated a dialogue between crypto investors, banks, and regulators.