The central bank of Lithuania has begun talks with commercial banks and virtual currency traders on their attitudes towards cryptocurrencies.
Though she acknowledges the risks, Jekaterina Govina, fintech strategy coordinator at the Bank of Lithuania, says:
Blind denial, reluctance to understand and to work with the cryptocurrency world leads nowhere.
Usually conservative on the matter of cryptocurrencies, the central bank of Lithuania has gathered representatives from the banking sector, virtual currency traders, those involved with ICOs, and officials from the Lithuanian Finance Ministry and the Financial Crime Investigation Services (FNTT).
Speaking at a subsequent conference, Govina said of the meeting:
It’s necessary that banks speak to those who have carried out an ICO or those who convert cryptocurrencies into conventional money. A dialog has been established and it remains to be seen where it will lead us.
Ambitions to Become a European Fintech Hub
The Bank of Lithuania requires traditional financial services to be separated entirely from ICOs and cryptocurrency-related activities. This position does somewhat restrict ICOs in the Baltic country, which maintains an ambition to become a northern European fintech hub.
Speaking of the country and its capital, Vilnius, the Lithuanian Vice-Minister of Economy, Marius Skarupskas, expressed his support for financially innovative blockchain technology earlier in 2018.
Lithuania and Vilnius have serious intentions to invest into breakthrough in this area and to become a leader on the regional and global scale.
According to statistics from Blockchain Center Vilnius, Lithuanian projects attract 10% of all global ICO investments.
Lithuanian Banks Regard Cryptocurrency as High-Risk
Cryptocurrency-related companies reportedly find it difficult to obtain banking services in Lithuania. The head of the Association of Crypto-Economy Market Participants, Vytautas Kaseta, said:
Commercial banks don’t understand the nature of the crypto-business and the business model. Therefore, they regard it as a high-risk business and require additional proofs of the origin of money and investment, and often refuse to open accounts for companies.
The Lithuanian Banks Association (LBA) welcomed the opportunity created by the Bank of Lithuania but remains firm on the rules for cryptocurrency clients. This was outlined by a comment from Mantas Zalatorius, LBA president, who stated:
A dialog is necessary. We are interested in speaking to everyone to better understand each other’s business models, but consumer protection, money laundering and terrorist financing prevention is a priority that must be ensured.
Zalatorius came away from the meeting expressing that if some “cryptocurrency market participants cannot say where the money comes from,” this poses a “serious problem.”
One wonders if the banks, crypto traders, and government of Lithuania will be able to strike a balance and work to actually promote the growth of fintech. It’s one thing to proclaim a desire to become a major fintech hub, but it’s quite another to allow for ICOs and cryptocurrency traders to be able to have all the tools needed to achieve such an agenda.
Should cryptocurrency projects face strict banking requirements globally to prevent sketchy ICOs and protect investors? Let us know your thoughts in the comments below.
Images courtesy of Pixabay and Bitcoinist archives.
