Lithuania is one of the most attractive countries for cryptocurrency activities. A favorable political and economic atmosphere contributes to effective business development. Therefore, many investors seek to obtain a Lithuanian VASP license, which opens up excellent financial prospects for the company.
General information
Before applying for licensing, you must register the company as an LLC providing electronic wallets for storing digital coins and exchange services. The minimum authorized capital is 120,000 euros.
According to licensing rules, you can obtain the following types of licenses for cryptocurrency activities:
- exchange of digital coins: one type of cryptocurrency for another, cryptocurrency for fiat funds (and vice versa), receiving commissions for this;
- e-wallet – provision of services for storing virtual assets and encrypted keys to crypto storage.
The new legislation also provides for maintaining a list of licenses for cryptocurrency activities and firms with a provision for appointing a responsible officer for AML (anti-money laundering).
5 reasons for getting this permit
Let’s consider the most critical advantages contributing to favorable cryptocurrency business in this jurisdiction.
1.Registration without payment of authorized capital
Thanks to the new legislation, it is possible to register a cryptocurrency company without contributing authorized capital. It can be done at any time and for any amount despite the minimum share capital requirement of €125,000.
2.Reliable legal regulation
There is strict legal control by the regulator FCIS – the Lithuanian Financial Crimes Investigation Service. Consequently, licensed companies automatically become attractive partners for other organizations. After all, the presence of this permit guarantees the honesty and reliability of the licensed company.
3.Start of implementation of the MICA Regulation
Many aspects of the MICA Regulation have already been implemented, which means that this state is striving to move to a pan-European standard for cryptocurrency activities as quickly as possible. Not all countries will succeed soon, but Lithuania is one of the pioneers in this aspect.
4.The head of the company may be a foreigner
In this case, appointing only a local head of the company is optional compared to other jurisdictions. Thus, a foreign individual can control the activities of the VASP company.
5.Possibility of receiving the passive income
VASP will be able to use staking, a tool for receiving passive income from digital coins. Most blockchains use a Proof-of-Stake scheme. It is very profitable, and the algorithm is similar to bank deposits. Annual income can be up to 10%.
Range of opportunities for a registered VASP company
Let’s look at what functions of cryptocurrency activities will be open to licensed companies:
- Exchange one type of digital coin for another. VASP organizations can provide services for exchanging electronic coins between their various types: utility tokens and currency. But buying or selling will not be possible (only with a license from an investment company).
- Exchange fiat funds for digital coins (and vice versa). The organization can exchange electronic coins for fiat funds and fiat funds for electronic coins. That is, a client of this company can trade tokens for fiat funds such as USD, EURO, and other real currencies.
- Digital wallet services. VASP licensing allows a company to store electronic money on behalf of its clients through digital vaults. In other words, the company provides the storage to the client, but the VASP will hold the encrypted keys.
- Storing and exchanging real money. The VASP company can take fiat funds as an advance payment for services provided (for example, electronic money exchange). This prepayment will appear on the individual client account as a fiat balance. Since the VASP license does not allow the storage of real money, these prepaid funds can be stored for some time, but subsequently, they must be exchanged for digital coins.
- Providing customer balance data and mediation. The person in charge of the company will be able to manage the digital storage of the company’s clients and provide data on the current balance and completed transactions. The company can also transfer electronic coins from the client’s storage to a storage facility that the client will declare.
The above shows that the Lithuanian VASP license has several advantages and guarantees financial prospects for interested investors.
