Bank of Lithuania, the country’s central bank, is reportedly opening up to cryptocurrencies, as it recently initiated a dialog between cryptocurrency traders, commercial banks, and government regulators in the country. Reportedly, the country is looking to become a fintech hub.
According to local news outlet The Baltic Times, Bank of Lithuania’s fintech strategy coordinator Jekaterina Govina stated that “blind denial, reluctance to understand and to work with the cryptocurrency world leads nowhere.”
Govina invited representatives from the Financial Ministry. The Financial Crime Investigation Service (FNTT), the initial coin offering (ICO) sector, and the banking sector, to a roundtable discussion.
During a discussion at Vilnius University, the central bank’s coordinator was quoted as saying:
“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.”
Bank of Lithuania has so far taken a conservative stance toward cryptocurrencies and ICOs, requiring a “clear separation” between traditional financial services and cryptocurrency-related activities.
Recognizing its stance may harm the fintech industry’s development in the country, the financial institution still aims to become “a northern European fintech hub.” To achieve its goal, it’s set to issue licenses “cheaply and quickly” – presumably to ICO operators – and accept license applications in English.
Things aren’t that simple, however, as according to Vytautas Kaseta, head of the country’s Association of Crypto-Economy Market Participants, businesses working with cryptocurrencies in the country often have a hard time working with banks. He was quoted as saying:
“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.”
In response to Kaseta’s words, the Lithuanian Banks’ Association (LBA) stated that while dialogue is necessary, commercial banks can only provide cryptocurrency-related businesses services after the origin of their funds is determined.
Per the LBA, cryptocurrencies can easily be used to launder money and finance terrorist organizations, which must be prevented. The association’s president, Mantas Zalatorious, stated:
We understand from the meeting that some of cryptocurrency market participants cannot say where the money comes from. This is a serious problem, and they didn’t realize it was a problem.”