The Central Bank of Lithuania has apparently started to look into cryptocurrencies and wants to start a dialogue between the banks, regulators and traders in the country. This is based on the report made by The Baltic Times, a news outlet which is based in Lithuania.
The Round Table Conference
According to the fintech strategy coordinator at the Bank of Lithuania, Lithuania’s central bank had given invitations to people representing the banking sector, the ICO sector, the Finance Ministry and the Financial Crime Investigation Service, to come together and have a sort of round table conference on cryptocurrencies.
The coordinator, Jakerterina Govina has reported that in spite of the risks being linked to the world of cryptocurrencies all over the world, it is an irresponsible thing to completely ignore cryptocurrencies and show reluctance to somehow get a better understanding of them. It will have no positive effect. With people representing the different sectors of the financial ecosystem engaging in conversation with each other, there can be a better way by which the overall system can work.
Banks would be better off having conversed with the people who have made use of initial coin offerings, in order to raise funds and then convert them into traditional fiat currencies.
The Dialogue Has Been Started
With this meeting having taken place, the dialogue between the different sectors definitely has begun. Last year saw the Bank of Lithuania release a document which laid out the foundations of how the bank stands regarding the world of cryptocurrencies and ICOs. According to this document, the FMPs (Financial Market Participants) have to make it a point to distinguish their virtual currency practices from the financial services activities.
It also does mention that despite the fact that the Bank of Lithuania wants there to be a very distinct separation between the financial services activities and the virtual currency activities, it will not at all make it difficult to issue licenses to those who are looking to conduct ICOs. Since the country wants to become a fintech hub throughout Europe, it will also be accepting applications coming to them in English.
One of the issues, when it comes to cryptocurrency-related business being done in Lithuania, is that the banks in the country thus far have been difficult to work with according to one of the board members at the Blockchain Center Vilnius. Vytautas Kaseta is of the belief that the banks in Lithuania do not really make an effort to understand the very different framework and business model within which the cryptocurrency businesses operates.
It is for that very reason that the banks deem cryptocurrency related businesses to be prone to a lot of risk. It also often happens that banks refuse companies doing cryptocurrency related business when it comes to opening accounts. They want more proof of how the cryptocurrency assets have been obtained by the businesses.
The Lithuanian Banks’ Association also agrees that the dialogue that the Bank of Lithuania has started is actually quite necessary to put aside the differences which are making things difficult. However, they emphasize the need for additional proof. They believe that since cryptocurrencies have been extensively linked with the conduction of illegal activities, the clients need to show the banks the proof which will make it clear to the banks about where they have gotten their funds from.
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