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In recent years, Lithuania has become a frontrunner in Europe’s blockchain and cryptocurrency scene, driven by its forward-thinking regulatory framework and a welcoming environment for fintech innovation. At the heart of this ecosystem is the crypto license, enabling businesses to operate legally within the European Union (EU) while enjoying the benefits of a smooth regulatory process.
“Virtual currency exchange and wallet service provider” license, issued by the Bank of Lithuania, enables companies to offer virtual currency exchange services (including crypto-to-fiat and vice versa) and virtual currency wallet services within Lithuania and across the EU.
Benefits for Businesses
- EU Passporting Rights:
Once licensed in Lithuania, companies can operate across all EU member states without needing separate licenses in each country. This “passporting” right significantly reduces regulatory hurdles and operational costs, providing access to a market of over 450 million people.
- Fast-Track Licensing Process:
The licensing process in Lithuania is known for its efficiency. The Bank of Lithuania aims to review applications promptly, typically within a few months, enabling companies to start operations swiftly compared to many other jurisdictions.
Two types of Licenses:
Lithuania grants authorization to utilize virtual currencies alongside traditional financial services (FIAT) and electronic money (e-money).
- Crypto Exchange License: allows companies to exchange cryptocurrencies for fiat currency or other cryptocurrencies, and to charge fees for these services.
- Crypto Wallet Custodian License: permission to manage cryptocurrency wallets, including tasks such as generating and securely storing client encryption keys.
Both licenses enable businesses to operate within a regulated framework, ensuring compliance with national and EU regulations while facilitating innovation and growth in the crypto sector.
Steps to Obtain a Crypto License
Obtaining a crypto license in Lithuania involves several key steps:
- Company Formation: a legal entity registered in Lithuania or another EU/EEA country;
- Application Submission: a comprehensive application to the Bank of Lithuania, including detailed information about the business model, AML/CFT procedures, corporate structure, and key personnel;
- Compliance Review: The Bank of Lithuania conducts a thorough review of the application, assessing the company’s compliance with regulatory requirements;
- License Issuance: upon approval, the Bank of Lithuania issues the virtual currency exchange and wallet service provider license, allowing the company to commence operations.
Future Outlook
Lithuania is poised to play a crucial role in shaping the future of blockchain and cryptocurrency regulation across Europe. It’s proactive approach to blockchain and cryptocurrency regulation makes it a strategic choice for companies aiming to enter or expand in the European market. With digital assets gaining wider acceptance, there’s a growing demand for trustworthy and compliant crypto services.
Curious to learn more? Our affiliated partners in Lithuania are ready to support you every step of the way, guiding your crypto business toward success.
Contact us today to get started!
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