On October 3, the Parliament of Liechtenstein approved a new regulatory action, the Blockchain Act, which will give investors greater protection while also helping to combat money laundering. This new act will take effect on January 1, 2020, and will help to make the country the first to offer comprehensive regulations regarding a token economy.
In a statement, officials for the government explained that “On the one hand, the law regulates civil law issues in relation to client protection and asset protection. On the other hand, adequate supervision of the various service providers in the token economy will be established.”
Lichtenstein may be the smallest country in Europe, but they are also one of the richest. One of the reasons they have been so successful economically is because of their innovation and welcoming of ideas to promote financial markets. These new regulations should help to greatly enhance the success of the fintech industry within the country.
The act took three years to prepare before the first reading was provided. That came in June, with the second reading occurring on October 2. It was approved by the parliament the following day and now goes to the desk of the Prince of Liechtenstein for final approval. Once he signs off, the final stage will be the enforcement of the act.
While a giant step forward for the small country, it is not the first time that Lichtenstein has delved into the emerging token industry. In May 2018, the Token and VT Service Provider Act (TVTG) was passed. This ensured that blockchain companies would receive legal protections while also offering protection for consumers and investors.
A month later, the Liechtenstein Financial Market Authority (FMA) created the Regulatory Laboratory/Financial Innovation Group. This group now works to facilitate between the market and regulators, helping to facilitate communication.
A press release by Prime Minister Adrian Hasler added “With the TVTG, an essential element of the government’s financial market strategy will be implemented and Liechtenstein will be positioned as an innovative and legally secure location for providers in the token economy.”
Many have hailed this as a historic moment in the industry. In a statement, Smart Valor CEO Olga Feldmeier wrote:
Oh what a big day! …Liechtenstein passes the blockchain act without any rejections! The big victory for hashtag#cryptocurrency and hashtag#blockchain industry. As the Parlament discussed the new law, that same moment I had a pleasure to exchange views on innovation in fintech with Alois, Hereditary Prince of Liechtenstein and US Ambassador at the 300 years Liechtenstein celebration in Vaduz. Impressive visionaries and great leaders!
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