The “Token Law” contemplates measures to combat money laundering and terrorist financing since it forces service providers to follow the required regulations.
The Parliament of the European country Liechtenstein unanimously approved a Law related to Tokens and Entities ProvidingServices Based on Trusted Technologies (TVTG), better known as the Blockchain Act.
This law, which will enter into force on January 1st, 2020, seeks to create a legal framework that encourages financial technology companies (FinTech) to establish themselves in the country and develop blockchain-based technology solutions.
“This law empowers companies to interrupt old processes, innovate in areas that have been outdated for decades and create better ways of doing things for ordinary people. This small country is taking a big leap towards disrupting the financial services market”, Sascha Ragtschaa, CEO of the blockchain company WeOwn, said.
The central objective of the law is to improve the protection of investors, combat money laundering and establish clarity. Thus, Liechtenstein would be, according to its Parliament, the first country to have complete regulation of the token economy.
The newly passed law will regulate civil rights; protect customers and their assets, whilst establishing adequate supervision of the various service providers in the token economy.
Thus, there is legal protection for token holders, real estate properties, shares in a company or some other type of assets. All this would now be guaranteed by the State. This is known as the “Token Container Model”.
“An essential element of the government’s financial center strategy is implemented with TVTG and Liechtenstein is positioned as an innovative and legally safe place for token economy providers”, the country’s Prime Minister, Adrian Hasler, said.
The model law serves as a “container” for rights of all kinds, regardless of whether they are rights to shares, real estate or licenses.
Mauro Casellini, lawyer and CEO of Bitcoin Suisse in Liechtenstein, stressed the importance of the blockchain law. He said the positive decision without dissent from the Government demonstrates the importance of the blockchain law.
“The TVTG not only creates legal certainty for all market participants, but also announces a new era, the token economy. With its pioneering role, Liechtenstein demonstrates, once again, that it is the ideal place for FinTech and blockchain companies and, therefore, also for us, in the heart of Europe”.
Liechtenstein is at the forefront of Western countries that have adopted blockchain technology, as is happening in Latin America and North America.
This friendly approach has already attracted several blockchain companies. Bittrex, the cryptocurrency trading platform recently announced its new trading platform, Bittrex Global.
Since this country is a member of the European Free Trade Association (EFTA) and the European Economic Area (EEA), companies can enjoy better access to the European market and also work with blockchain.
Other nations that have understood the value of blockchain technology and are trying to create their legal framework are Estonia and Belarus. Now, other European countries will be able to follow the example of the regulation established by Liechtenstein.
By María Rodríguez