Liechtenstein has introduced new blockchain laws – a careful and light-handed regulatory framework for the blockchain industry.
New Blockchain Laws Liechtenstein: “The Blockchain Laws Liechtenstein go much further than the blockchain legislation of other countries – empowering tokenization of assets, security token offerings and managing crypto assets. The Blockchain Law is intended to regulate all activities that are possible on technical systems such as distributed ledgers and blockchain systems, and thus provide legal certainty”
– Adrian Hasler, Prime Minister Liechtenstein
Official Announcement of the Blockchain Laws by the Government of Liechtenstein: On the evening of June 21st 2018 there was an information event on the blockchain laws at the auditorium of the University of Liechtenstein.
The prime minister Adrian Hasler further said: “the blockchain industry is still at the beginning … we see a future full of opportunities”
The Government of the Principality of Liechtenstein was hosting the event with prime minister Adrian Hasler (minister for General Government Affairs and Finances) and other key partners to outline the background to and key elements of the Liechtenstein blockchain law.
Blockchain Laws Liechtenstein are setting new legal standards to empower the crypto industry, but also many companies will prefer Liechtenstein over other jurisdictions such as Malta, Gibraltar, Singapore, Bermuda or Cayman.
The law aims to erase the existing risks in the area of Cryptocurrencies, provide legal certainty and security however without imposing undue limiting restrictions and therewith provide a reliable framework for an entire economy of digital and digitalized assets.
The exact content of the Blockchain Laws Liechtenstein will be published in June 2018. The enactment is expected by mid 2019 and the law is intended to be put in force in the second half of 2019.
Most importantly the Blockchain Act shall provide basis that every possible asset (i.e. movables, real estate, bonds, securities etc.) can be tokenized, thus digitalized and listed on a Cryptocurrency Exchange. This is expected to facilitate the exchange and also storage of ownership and to unleash the actual value of any property.
The range of applications is extremely wide. For instance it would enable any enterprise to obtain financing in a simplified and less cost intense procedure as well as a better valuation of the company. This could be done by offer utility tokens or security tokens, such as tokenization of shares and offering them for trade compared to cost intensive private placements or IPOs.
The Blockchain Laws Liechtenstein will provide clear regulation on the determination and transfer of digital ownership and therefore the assets represented by the token.
Further the Blockchain Act will provide certain levels of licensing for companies providing services in the Token Economy such as secure storage of tokens. In terms of storage the law will demand a high level of security for storage and prevention of hacking or loss complemented with the requirement of insurance for the stored values.
The Blockchain Act will be complemented by the existing high level KYC and AML requirements under Liechtenstein law as well as the vast regulation of the conventional financial market.
Presentation Blockchain Laws Liechtenstein
Dr. Thomas Dünser, Head of the Blockchain working group at the Ministry of General Government Affairs and Finance, was presenting a summary of the key elements of the Blockchain Act June 21st. This is an unofficial translation of his presentation.
You can also a PDF version here:
The key elements of the Blockchain Act are:
The Blockchain Act regulating a Token Economy will provide legal basis for
– Security Tokens: the tokenization of any possible asset (movables and immovable, rights, securities etc.) this the digitalization of any kind of assets.
– Ownerhips of digital assets (i.e.Tokens).
– Transfer of ownership of digital assets.
– Safe storage of digital assets.
– Legal requirements for storage of digital assets.
– Several levels of licensing for business providers in the Token Economy
– Security Token Offerings (STO’s), Initial Coin Offerings (ICO’s), Token Sales and Token Generation Events (TGE’s).
Liechtenstein is a Financial Powerhouse
The Principality of Liechtenstein offers a specialized and stable financial centre with strong international ties.
1. AAA rating from Standard & Poor’s
2. Direct market access to two attractive economic areas, Europe via EEA (European Economic Area) and Switzerland.
3. The assets under management of Liechtenstein banks amounted to USD 235 billion at the end of 2016.
4. 700+ licensed investment funds 100+ licensed asset management companies
The Principality of Liechtenstein is located between Switzerland, Austria and Germany – approx. 1 hour drive from Crypto Valley Zug Switzerland. The country, 160 square kilometers and 38’000 inhabitants, has developed a very professional financial industry in the last decades. In particular the country is renowned for its company law and its unique Foundation law and low taxation.