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Lithuanian Central Bank introduces new approaches to Cryptocurrency

The Central Bank of Lithuania introduces a document in which it has presented new approaches to cryptocurrency. The bank has revised its position on ICO and digital assets particularly. A statement by the bank says that the intention is to provide participants with “uniform rules of the game.”

The bank had issued a statement with an official point of view on ICO and digital assets in October 2017, for the first time. The document stated that participants in the financial market are entitled to establish investment funds for virtual assets and even the parameters for using virtual assets in payments were presented.

The latest statement of Central Bank says that although the agency has not revised its fundamental principles but it now allows professional investors to create funds and that includes digital asset funds too. Under the new policy, exchanges are allowed to process crypto payments received by private companies into a local fiat currency . However there are certain reservations too like financial market participants are prohibited from accepting digital assets with the requirement of return with or without interest. In addition, financial market participants are prohibited from lending virtual assets and taking virtual assets as collateral, unless they can be treated as securities.

The bank also stressed that financial market participants are obliged to separate their traditional financial services from activities related to digital currencies and should not provide cryptocurrency related services.

The statement of the central bank, apparently, was made on the basis of a regulatory workshop held last October in order to consider the “threats and potential benefits” of the ICO for the Lithuanian economy. The amount of funds raised during the ICO required an increase in measures and aimed at preventing fraud in this area. During the seminar, it was announced that Lithuania is the world leader in ICO market growth rates (350%).

In April 2018, the Central Bank of Lithuania announced that it was considering the possibility of issuing its own digital currency. Currently, the bank is at the second stage of development of the LBChain project – an initiative designed to support companies developing blockchain products.

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