A month ago, the European Securities and Markets Authority (ESMA) published a statement proposing to introduce a unified EU and EEA blockchain regulation. This would mean a confederacy of the previously independent legislative proposals of some of the blockchain-friendly countries.
2018 already, the EU Blockchain Observatory and Forum spoke of an EU and EEA-wide blockchain regulation. Three thematic-relevant reports were then published during the year: Blockchain Innovation in Europe, Blockchain and the DSGVO, and Blockchain for Government and Public Services.
In autumn 2018, however, the mood in the EU regarding a blockchain regulation was again rather subdued. At a conference in Vienna, the EU finance ministers said that a Europe-wide regulation was not in a hurry.
In its January statement, however, ESMA highlighted the issues of ICOs and crypto assets, which are considered MiFID II compliant and can be classified as financial instruments.
Among other things, national authorities (NCAs) worked with a survey in which the various business models with crypto-assets were analysed and the various European countries (including Liechtenstein) commented on them.
Status Quo: Regulations of the EU Countries
There are already several EU countries that want to regulate blockchain and crypto currencies with their own financial market supervision. In Gibraltar, for example, Distributed Ledger Technology (DLT) is implemented as a regulatory framework by the Gibraltar Financial Services Commission.
However, a real blockchain law does not yet exist in the form announced by Liechtenstein last year (more information HERE).
Liechtenstein as First Mover with its own Blockchain law
On 28 August 2018, the Government of Liechtenstein presented the Blockchain Act (Trusted Technologies Act – VTG), which is unique in its form.
The government is planning a legal framework for the use and trading of digital assets. Head of government Adrian Hasler says that the law “should serve as a legal basis for a sham economy and thus offer regulatory security to all parties involved”.
According to Thomas Dünser, government employee, the VTG (Blockchain Act) deals with several and different topics, such as the civil law part, that deals with questions of ownership and the legal effect of a transfer. In addition, it is about the basic functions of the token economy and also about the publication obligations for the issue of tokens, which are still unclear today. Last but not least, the money laundering and sanction laws for the Token Economy are an essential component of the VTG.
Opinions from Liechtenstein on a unified law
The idea of passing an EU and EEA-wide law left many questions open, such as whether blockchain companies still see a point in coming to Liechtenstein if there is legal regulation everywhere anyway?
Thomas Dünser believes that such a regulation would provide answers to open questions about the financial market-related applications of blockchain technology. It is important for the EU to create clarity and thus make room for new developments.
Thomas Nägele, Nägele Rechtsanwälte, also sees ESMA’s proposal in a positive light. He thinks with that unified law, the development of blockchain technology would be driven forward. In comparison to other blockchain-friendly countries, Liechtenstein has already built up a very large know-how and has been able to gather a great deal of experience – which has given Liechtenstein a pioneering role. In addition, the VTG would fall into the civil-law part, which in the EU is reserved for the respective countries anyway. This means that not much would change in Liechtenstein, even if the directives were amended EU-wide.
Some voices in Vienna, however, are less convinced by the ESMA’s proposal: Crypto Professor Alfred Taudes, Vienna University of Economics and Business Administration, is of the opinion that there will probably be no standardization in the long run, since the legal systems between the individual European countries are too different.
It is difficult to predict how quickly a Europe-wide law will come into force. According to Thomas Feldkircher (Nägele Rechtsanwälte), it is more likely that certain directives, such as the 5th Money Laundering Directive and the Crowdfunding Directive, will be swiftly implemented, but that other directives will be implemented soon.