During a meeting in Vilnius, the fintech coordinator of the central bank of Lithuania has admitted there is no point being reluctant to cryptocurrencies. They have started discussions and are about to implement regulations on crypto businesses and commercial banks.
According to the local community, Lithuanian projects attracted last year 10% of ICO investments. This is as a result of the ongoing growing popularity of cryptocurrencies in the Baltic state.
A high-ranking official of the Central Bank of Lithuania said this week that despite the risks, “the blind denial, the reluctance to understand and work with the cryptocurrency world, leads us nowhere.” To that effect, a dialogue was recently introduced by the Lithuanian central bank with representatives of the crypto sector and the Lithuanian commercial bank. This is to discuss on regulation that could be implemented on that sector. Financial authorities like the ministry of finance and the financial crimes investigation service (FCIS) had to consult and agree with that decision.
Ekaterina Govina, the central bank’s fintech coordinator said: “We sat at one table – the banks, the ICO companies, the FCIS, and other stakeholders.” During a conference at the Vilnus University, Govina also stated that “It is important that banks discuss this [matter] with entities behind initial coin offerings and companies that exchange cryptocurrencies. We have established a dialogue. Let’s see where it’s going to take us.”
So far, the Bank of Lithuania had clearly separated traditional financial services from anything that has to do with ICOs. That conservative approach of the central bank has in no way affected their plan and ambition to turn Lithuania into a fintech center in the North of Europe. A way to hasten the accomplishment of that goal is by accelerating the issuance of cheap licenses for crypto businesses and accepting applications in foreign languages like English.
The head of the Lithuanian association of the crypto economy participants in the person of Vitautas Kasheta says that there are a lot of issues companies and startups working with cryptocurrencies are facing when they need banking services. “Commercial banks don’t understand the nature of cryptocurrency. That’s why they think this is a risky business and demand additional guarantees. They often refuse to set up accounts for [crypto] companies,” he explained.
“The dialogue is necessary. We are interested in having it with everybody so that we better understand each other’s business models,” said Mantas Zalatorius, president of the Association of Lithuanian Banks. Zalatorius added that commercial banks would only provide services to companies that prove the origin of their capital as consumer protection, money laundering prevention, and anti-terrorism financing measures are their utmost priorities.