In an interesting development, the Bank of Lithuania announced this week the release of an STO guidance program. Bank officials stated that growing STO interests from the business sector spurred the decision. In an attempt to avoid confusion, the bank decided it was best to help investors and businesses better understand the STO process.
Bank of Lithuania – Cut Fraud
Notably, the Bank of Lithuania is the first financial institution in the region to take such a maneuver. Bank officials hope that the new guidelines will help to spur further STO use in the local economy. Additionally, the bank wants to see a cut in fraudulent ICOs. STOs offer businesses the benefits of a blockchain-based strategy with the legal peace of mind found in traditional investments.
Board member, Marius Jurgilas, took a moment to describe the overall directive of the project. He explained that there was a lack of transparency in the market. He spoke on how the new guidelines aren’t actual regulations, but rather, a way for investors to better classify their investments. Lastly, he discussed the need to avoid confusion caused by misinformation.
Bank of Lithuania Offers Individualized Consultations
For investors that reviewed the guidelines, but are still confused about the classification of a digital asset, the bank offers direct individualized services. A bank official can review your token and clarify exactly what asset class it is. Bank executives explained that each token assessment is done on a case-by-case basis. In this manner, the Bank of Lithuania creates a pro-blockchain environment that entices new investment into the region.
Bank of Lithuania – Host an STO
Parties looking to host an STO in the country need to first assess their assets to see if they fall under the current regulated financial instrument categories available. Additionally, businesses must adhere to both the local and EU securities laws.
Lithuania continues to see further crypto expansion. In June, government officials announced plans to institute new regulations on blockchain firms and people engaging in crypto-related activities. For example, businesses now must prove the identity of their clients prior to conducting any transactions.
Additionally, any crypto profit over $1100 must be reported to officials. This includes fiat-to-crypto as well as crypto-to-crypto transactions. This move echoes that of many other regulators worldwide that require KYC and AML protocols.
Consequently, the institution of these regulations formalized a host of crypto businesses including brokers and exchanges. Lithuania, like much of the EU, recently shifted stances after realizing the true potential of blockchain technology and the inevitability of its integration. Now lawmakers want to entice investors to their shores in the hopes of spurring the local economy.
The Bank of Lithuania isn’t alone in its aspirations to incubate more regulated blockchain crowdfunding. Recently, both the SEC and UK regulators issued similar guides. Uniquely, this latest guidance comes from a financial institution, as opposed to a regulatory body. The news shows a shift in strategy from the traditional sector as more banks open their doors to STOs.
Banko of Lithuania – A Beacon of Light
There is no doubt that the Bank of Lithuania has the right strategy for the digital economic revolution. You can expect to see more traditional financial firms to step up and release some form of guidance for their individual markets in the near future. For now, Lithuanian investors just got a leg up on the competition.