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Cryptocurrencies are becoming more and more popular. The number of
companies and individuals that want to invest in digital currencies is growing
exponentially. This has resulted in a lot of interest from local and international
investors. In Lithuania, as in many other countries, the demand for
cryptocurrency licenses is rising.
Cryptocurrencies are digital currencies that use cryptography as a security
measure instead of being centrally controlled. Think of them as virtual
currencies that function like money. In this article, we get to know the types of
crypto licenses in Lithuania.
What is Cryptocurrency Licensing?
Cryptocurrency licensing, in general, is the process of issuing a license to
allow businesses to operate as cryptocurrency exchanges. It allows these
businesses to legally exchange fiat currency for cryptocurrency and operate as
an exchange.
These licenses are issued by the country’s central bank or banking authority.
Cryptocurrency exchanges in Lithuania are regulated by the Bank of Lithuania.
The Bank of Lithuania sets strict requirements. Before it will issue a
cryptocurrency license, the bank will inspect the exchange’s compliance with
relevant laws and regulations. It will also inspect the exchange’s financial
condition, including the firm’s ability to withstand any cyberattacks.
Types of Cryptocurrency Licenses in Lithuania
The Bank of Lithuania has two types of cryptocurrency licenses. The first is a
virtual currency exchange license. The second is a virtual currency wallet
license.
Virtual currency exchange license – This allows the holder to carry out
exchange services for fiat and virtual currency. These services include
exchange and conversion of virtual currency into and from other currencies, as
well as the exchange of fiat money for other virtual currencies.
Virtual currency wallet license – This allows the holder to issue and store
virtual currency. The holder may also issue and exchange virtual currency for
fiat money. This license is also called a custodial license.
Benefits of Cryptocurrency Licensing
Cryptocurrency licensing is mandatory in Lithuania. The benefits of obtaining
a cryptocurrency license include the following.
Security – Cryptocurrency licensing gives you the legal right to operate a crypto
exchange. This means that you can legally store and safeguard customer
funds.
Compliance – You must comply with all relevant laws and regulations,
including anti-money laundering and countering the financing of terrorism
(AML/CFT) laws. You must also report suspicious transactions and comply
with Know-Your-Customer (KYC) and due diligence requirements.
FIAT – You can exchange fiat money and cryptocurrencies. You also have
access to international payment gateways, such as Visa and MasterCard. This
opens the door to a global customer base.
Requirements for Cryptocurrency Licensing
There are a few requirements for crypto licensing. They include the following.
Registered Financial Institution – You must be a registered financial institution.
This will help you to meet the requirements for a license.
Qualified Personnel – You must have qualified personnel to operate the
exchange.
Security Measures – You must have proper security measures in place to
safeguard customer funds.
Conclusion
Cryptocurrency licensing is mandatory in Lithuania. It is also a strict process
governed by the Bank of Lithuania. This is a great opportunity for businesses
to get into the blockchain and cryptocurrency market and comply with all
necessary rules and regulations. Cryptocurrency licensing is also a great way
to get your business off the ground and gain a solid customer base. The
benefits of cryptocurrency licensing include the ability to safeguard funds and
meet AML/CFT requirements, access to global payment gateways, and use of
digital currency.
The Article is written
by the lawyer of the company Adam Smith
+370 52078525
adamsmith.it