Bank of Lithuania revises crypto and ICO position in line with current market environment

Posted 21 February, 2019

The Bank of Lithuania has reportedly revised its attitude towards digital assets and ICOs following the observed market picture as well as striving to provide the participants of all financial markets with the fair terms.

The Bank made an announcement last week saying that it was decided to change the terminology regarding the cryptos. Specifically, the previous document involved the term virtual currency, while now it has been replaced by "term virtual assets". 

"The position defines how and when virtual assets may be used for payment, specifies when and how financial market participants may set up investment funds for investment in virtual assets, as well as addresses other relevant issues," the report reads.

The bank still sticks to its basic principles, stating that representatives of financial markets should distinct financial services from those connected with cryptos, refraining from activities with digital assets. This attitude prevents making payments in digital assets but allows for using third-party services. Payments are still should be in fiats.

In October 2017, the bank published a document where it disclosed how and in what circumstances ICOs and cryptos can be classified as a means of payment. In addition, the document contained the terms for representatives of financial markets to establish investment funds in cryptos.

As for adjustments, the bank enables professional investors to establish financial funds in cryptos. Meanwhile, participants of financial markets still cannot accept cryptos with the obligation to repay them (with or without interest) and issue loans in digital assets or accept them as collateral, unless they are securities.

In October 2018, during an ICO-dedicated seminar, the Lithuanian government said that an ICO turnover of about EUR 500 million ($567 million) over the previous eighteen months summoned stricter anti-fraud mechanisms. In addition, the country was reported to be among the global leaders with a 305% growth of the industry. 

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