Lithuania will impose strict licensing requirements on crypto companies by 2025, significantly reducing the number of companies that can operate in the country.
Central bank board member Simonas Krepsta further told Bloomberg April 3rd that this move aims to establish robust oversight of the sector as digital assets become increasingly integrated with the financial system.
Reduction of numbers
Krepsta said that there are currently 580 companies operating in Lithuania, and it is unlikely that most of them will be able to successfully obtain the new license. He added that the number of crypto companies expected to meet the expanded criteria for full licensing will be “much lower” than current registrations.
The licensing process is expected to be completed in June 2025, and companies that fail to obtain licenses will be forced to leave the Lithuanian market.
The Bank of Lithuania will begin a pre-assessment procedure for licensing in July. Some companies already licensed to operate in the EU through licenses from other states may be exempt from applying for the new license.
The central bank will also focus on increasing its employees’ understanding of crypto business models.
The tightening of regulations comes in response to the challenges the crypto industry faces in lightly regulated environments. It aims to curb the unregulated expansion of crypto companies in the country.
Krepsta cited numerous examples of failures, embezzlements and other financial crimes in the US, Europe and Lithuania, illustrating the need for more robust supervision.
Increasing regulation
Over the past decade, Lithuania has built a reputation as a thriving FinTech hub, attracting a slew of financial technology startups, including prominent names like Revolut – which has secured its banking license in the country.
Lithuania’s initiative reflects a broader global trend, with several countries – including financial centers such as Singapore, Hong Kong and Dubai – introducing comprehensive regulatory frameworks for digital assets in recent years.
The EU is also poised to bring its inaugural uniform crypto legislation, the Markets in Cryptoassets (MiCA), into effect in January 2025.
The post that Lithuania would introduce a strict licensing regime for crypto companies by 2025 first appeared on CryptoSlate.