The Opportunities of Liechtenstein’s New Blockchain Act
Oct 24, 2019
As a pioneer in the crypto-financial service industry, we at Bitcoin Suisse are excited to see Liechtenstein taking steps forward to merge the digital and physical world using the power of blockchain technology. The outstanding professionalism of the government and regulator show why Liechtenstein is well-positioned to continue its pioneering role in the industry. The recently-enacted Blockchain Act – formally entitled the “Tokens and Trustworthy Technologies Law (TVTG)” – is another significant step forward as it is the first law in the world to specifically address the governance of the token economy and is set to come into force at the beginning of January 2020.
The TVTG will bring several distinct benefits to the development of the Blockchain and Token Industry. From our point of view, one of the major advantages of TVTG will be the “Token Container Model” (TCM). This model optimizes the process of asset tokenization dramatically and will push tokenization to another level in the blockchain industry.
In the Token Container Model, it will be possible to tokenize any given asset or right including real estate, gold, stocks, bonds, money or even coins. This setup means that there is a clear separation (enshrined in the law) of the rights associated with an item or asset on the one hand and the technical aspects of a token and its code on the other.
The TVTG also introduces a number of different important actors in the tokenization process. These include Token Generator, Token Issuer, TT Exchange Service Provider and several more. These services will help the FMA to regulate the TT-Provider market and ensure a secure and trustworthy ecosystem in Liechtenstein.
Another crucial part of the Blockchain Act is adapting pre-existing laws to the token economy. Several laws in Liechtenstein have been changed and adapted to the new TVTG, with the most relevant changes coming in the area of civil law. These changes ensure that the underlying right, which a token contains, can be effectively transferred from X to Y. It is important to note that the TVTG only regulates the token economy. Other pre-existing laws applying to financial markets and its integrity in Liechtenstein remain unchanged.
As the industry develops, the EU will play an essential role in the Blockchain Act’s application and in the token economy in Liechtenstein in general. We as a company hope, that the EU will take a closer look at the TVTG and will use several parts or the even the whole law as an inspiration for a European legislation.
Based on our more than 6 years of experience and industry knowledge, we are convinced that the TVTG is truly a forward-looking piece of regulation and will go a long way towards revolutionizing the token economy in 2020 and beyond. We see the Blockchain Act as an opportunity for Bitcoin Suisse AG (Liechtenstein) to offer many new and improved tokenization services to clients and new interested parties both in the Crypto Country Liechtenstein and the greater Crypto Valley ecosystem – and beyond.