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Liechenstein Blockchain Act

Liechenstein Blockchain Act

Liechenstein Blockchain Act

Token and Trusted Technology Service Provided Act (TVTG) was approved by the Liechtenstein Parliament and now the country is the first and unique country that has a comprehensive regulation of the token economy where the first ICO was performed in 2016. The law aims regulating client and asset protection against money laundering and financing of terrorism as well. With the mentioned law, Liechtenstein defined minimum requirements for business models on blockchain systems. The act covers all applications like cryptocurrencies, utility tokens, stable coins, security tokens, ICOs (Initial Coin Offerings) processes, payment steps, STOs (Security Token Offerings), Exchange processes, private investments and complementary financial services across the country.    

One of the fundamental components of the act is ‘token’ definition. The law defined ownership, possession, and transfer details of tokens for strengthening legal certainty for users and service providers. The law aims also drawing a broader range of assets and other rights on blockchain systems not only for financial systems but also for logistics, mobility, energy, media etc.

Another main component of the law is broad definition of trustworthy technologies (TT systems). The regulation covers all possible versions of blockchain technology and clarifies minimum requirements on TT systems. With the four main segments of proprietary, act defines right of ownership, exhibition right, lien, and copyright processes. The main motivation of specifying all definitions is covering proof of ownership, digital contracts, selling transactions, lombard loan, portfolio management, insurance solutions and transportation chain.

The law also brings a new model called as ‘the token container model’ into the crypto markets. The term of container represents all existing and future applications of token economy. It clarified the relation between token and right and made a sharp differentiation between token owner and possessor., which still found as a grey area in crypto assets market. The cross-border tokenisation will be possible by the legal framework provided by the law which will make stronger the position of the country among crypto markets of other members of European Union, especially Germany and Switzerland.

We will touch on more foundations about the regulatory framework of cryptocurrency markets in the following articles. For any further questions, please reach us via or visit our CryptoIndexSeriesTM Platform for a better analysis of the crypto market space.     

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