Liechtenstein took a new, very significant step in terms of developing the regulatory framework within its already crypto-oriented jurisdiction. The Principality Parliament passed an act that could attract even more crypto startups than before. On October 3, the Liechtenstein legislature unanimously voted for “Token and Trustworthy Technology Service Providers Act” (abbreviated TVTG in German). The government announced the result by the press release on the website.
“On the one hand, the law regulates civil law issues in relation to client protection and asset protection. On the other hand, adequate supervision of the various service providers in the token economy will be established.”
The TVTG bill is also commonly called the Blockchain Act. It largely embraces blockchain technology under the term “TT system,” or “transaction systems based on trustworthy technologies.” It is worth noting that the legislators of Liechtenstein deliberately adopted such an abstract definition to cover future developments in this area and new generations of technologies related to crypto.
The innovative regulation was commented by the country's Prime Minister Adrian HASLER:
“With the TVTG, an essential element of the government’s financial market strategy will be implemented and Liechtenstein will be positioned as an innovative and legally secure location for providers in the token economy.”
Lawyer Thomas NAGELE with his law firm was directly involved in developing the legal framework and notes that the so-called “Token Container Model” has become the main concept of the law. Under this concept, the token serves as a container for all types of rights, regardless of whether they are stocks, real estate or licensing rights. Nagele believes that such comprehensive approach is unique in Europe in its own way, since it regulates the transfer of tokens, bringing them in line with civil law. Thus, transactions with tokens are fully defined in legal terms.
The adoption of the law is important for other reasons: Liechtenstein is a member of the European Free Trade Association (EFTA) and, unlike Switzerland, is a member of the European Economic Area (EEA). This means that crypto companies based or represented in its jurisdiction will be able to gain easier access to the pan-European market, as well as be compatible with the legal framework of other countries in the region. Once again, the principality proves its own determination when it comes to attractiveness for capital and investment.
Image courtesy of Crypto Nation