Antsy Lithuania Latest to Anticipate EU Crypto Law With One of Its Own

Lithuania is the latest impatient member of the European Union seeking to jump the gun by creating its own crypto licensing regime, because EU laws might come too late to safeguard the sector’s reputation, local ministers told CoinDesk.

With Brussels’ landmark law – the Markets in Crypto Assets Regulation (MiCA) – potentially not in force until 2025, the Baltic nation wants to do its “homework” in advance, the country’s deputy finance minister told CoinDesk. 

But the plans for the law, which is set to be debated in the country’s parliament, are making some companies based in Lithuania fear for their future.

The EU is in the final stages of negotiating MiCA. The single authorization regime for the bloc of 27 nations has been years coming and could transform the sector by allowing businesses to tap a market of hundreds of millions. 

Some countries, however, can’t wait to grab their slice of the burgeoning sector.

The European Commission, the EU's governing body, first asked for advice on how existing regulations apply to crypto in March 2018. 

Since then, crypto uptake has ballooned, and entire initiatives such as the Facebook-backed Libra, then renamed Diem, were born and died.

Even once lawmakers iron out their final wrinkles in the law, like how to treat Libra-like stablecoins, non-fungible tokens and decentralized finance, there will be a transition period for as long as two years before MiCA takes effect.

“MiCA is kind of the biggest thing that's upcoming, it's a good decision; we support it,” Mindaugas Liutvinskas, vice minister in the Lithuanian ministry of finance, told CoinDesk in an interview. 

“But before we get there, it's, what? 2025, end of 2024; we still have quite a lot of time.

“What we decided to do is take practice steps, do all our homework, to strengthen our regulatory framework,” he said, calling his proposed law a “quick fix” that MiCA can then take “to the next level.”

Liutvinskas is worried that unless he acts fast, less upstanding companies might bring down the sector’s image.

“For both the government and market participants, the worst-case scenario would be to have some sort of a bad situation, some sort of scandal in terms of money laundering or circumventing sanctions,” he said. “Reputation is an essential resource in this line of business.”

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