Blockchain technology is driving economic transformation and Liechtenstein wants to be in the front seat, according to the country's prime minister.
As such, the Liechtenstein government has set out to draw up "sensible," comprehensive blockchain legislation to create a legal environment that's conducive to innovation and light on regulation.
While other nations have steadily introduced blockchain and cryptocurrency-related laws, Prime Minister Adrian Hasler told CoinDesk that Liechtenstein's forthcoming bill "goes much further than the blockchain legislation of other countries."
"The 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," Hasler said. "But the law covers much more than merely the issuing of cryptocurrencies and utility tokens. The law is intended to provide the necessary legal framework for a wide range of new services and business models relating to these technologies."
Hasler indicated that the bill, dubbed "The Blockchain Act," will outline a careful, light-handed regulatory framework.
The prime minister explained:
"There is no point in creating regulations that are excessive and lacking in practical relevance, because then the blockchain economy will simply develop outside the regulations. That surely would not be in the interest of any country. Therefore we want to propose a sensible regulatory approach by means of this law, where the role of the state in creating legal certainty and confidence comes into effect where it is needed."
The bill will be primarily informed by Liechtenstein's Financial Market Supervisory Authority, which has so-far addressed over 100 blockchain and cryptocurrency-related enquiries.
Hasler further noted that the government has reviewed the legislation of other countries, and is also in consultation with variety of fintech companies, financial service providers and lawyers, with the aim of making the bill "as relevant in practice as possible." He expects to present the bill to the public this summer.
While the timing of the legislation coincides with an industry boom, Hasler said Liechtenstein's interest in the blockchain is not new, and the bill follows an analysis of "the opportunities and risks of a blockchain economy" by a working group that convened about one-and-a-half years ago.
Hasler told CoinDesk:
"It quickly became clear how the blockchain can significantly change almost all aspects of our economic life and financial services."
Likewise, Hasler attributed the timing of The Blockchain Act to a broader attempt at "state innovation."
"For the Liechtenstein government, it is important that the state and the authorities are themselves in a position to develop further," he explained. "The Blockchain Act stems from this process of innovation."
The small European country, which has a population of less than 40,000, has thus far demonstrated a growing appetite for blockchain and cryptocurrency technology.
In March, Crown Prince Alois Philipp Maria revealed that the royal family is considering investing some of its $5 billion fortune in cryptocurrencies, and suggested that the blockchain could be used to increase the efficacy of the government.
And, an early mover in its industry, Liechtenstein's Bank Frick also announced in March that it now allows clients to invest directly in cryptocurrencies, citing demand from companies across Europe as the catalyst for its decision.
Adrian Hasler image via Wikimedia Commons