Central Bank of Lithuania Issues Updated Position on Virtual Assets and ICOs

The Bank of Lithuania has updated its position on virtual assets and initial coin offerings, according to an announcement published on Feb. 14.The Bank of Lithuania initially issued a document detailing its position towards ICOs and digital currency in October, 2017, defining how and when virtual assets may be used for payment.

The document also specified how and on what terms financial market participants may establish investment funds for investment in virtual assets.

The recent document reveals that the bank has not made changes to its underlying principles, stressing that FMP still should separate their financial services activities from those associated with virtual currency and should not participate in activities or provide services associated with virtual assets.

The policy still does not allow FMPs to receive payments with virtual assets, but provides the possibility to employ third-party services.

The bank's position now allows for the creation of financial funds including viritual asset for professional investors.

FMP are prohibited from accepting virtual assets with the obligation to repay them with or without interest.

The bank also stresses that FMP are not allowed to issue virtual asset loans or accept virtual assets as collateral, unless they are considered to be securities.

Last October, Lithuanian regulators held a seminar examining the "Threats and potential benefits" of ICOs to the country's economy.

The authorities then outlined that a high ICO turnover volume - €500 million over the previous eighteen months - called for tougher anti-fraud mechanisms.

Last June, Lithuania released comprehensive new "Guidelines" on ICOs.