Responding to dynamic market developments, changing foreign positions on virtual assets and seeking to ensure equal operating conditions for all financial market participants, the Board of the Bank of Lithuania updated its position on the virtual assets and initial coin offerings (ICOs).

The Bank of Lithuania is changing the term ‘virtual currency’, which was used to date in this position, to ‘virtual assets’ and in its latest statement, the bank defines when and how virtual assets can be used.

Possibility

According to the document, the financial market participants should not be involved or provide services related to virtual assets, the activities should be clearly separated from the activities related to virtual assets.

Although the ban on financial market participants receiving payments from virtual assets remains in force, the position provides for the possibility of applying models to them when payments are received through the third parties. The financial market participant’s account can only be settled in traditional currencies, so there is no additional risk.

Investment Funds

In order to ensure equal operating conditions for financial market participants, the Bank of Lithuania allows the creation of investment funds for professional investors to invest in virtual assets. The bank underlines that such funds are created abroad and their investment units may be distributed in Lithuania after the special procedures.

According to the release, the financial market participants cannot accept virtual assets by committing them with or without interest. It is also not possible to provide loans with virtual assets or to take out collateral with it (unless the asset tokens are held as securities).

It is planned to update the position after regular assessment of financial market developments. For the first time, the Bank of Lithuania announced its position on this issue in 2014. January 31, warning consumers about the potential risks of virtual currencies.

World’s First Numismatic Digital Coin

As Cryptovibes.com already reported, the Central Bank of Lithuania will be the first bank in the world to issue a digital numismatic coin this year. The coin will be named ‘LBCoin’ and will be based on the blockchain technology. By launching ‘LBCoin’ Lithuanian Central Bank aims to test cryptocurrency and distributed ledger technologies.



