Lithuania updates its views on cryptocurrencies, seeks to level the playfield

The central bank of Lithuania seems to have softened its approach towards ICOs and digital assets in general. The regulator published its updated views on Initial Coin Offerings (ICOs) promising to “level the playing field”.

In the initial document published in October 2017, the regulator specified the rules of creating investment funds for digital assets and clearded out, when virtual money can be used for payments. With the new update the financial market participants are allowed to exchange the proceeds received in cryptocurrency into local fiat money using the third-party services.

“Financial market participants should not participate in activities or provide services associated with virtual assets; they should also ensure separation of their activities from activities associated with virtual assets. Although financial market participants are still prohibited from receiving payments in virtual assets, the position provides for the possibility of using third-party services. Payments to a financial market participant’s account can only be made in traditional currencies, thus no additional risks are entailed,” the document says.

Apart from that, they cannot issue loans based on cryptocurrency assets and accept such assets as collateral unless such assets are considered as securities under the existing legislation.

The bank also emphasized that FMP should still make efforts to separate their traditional financial services activities from activities associated with digital currencies, and that indeed, FMP should not participate in or provide virtual currency-associated services at all.