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Lithuania's New Regulation for Virtual Asset Service Providers (VASPs) and its Impact on the Cryptocurrency Market
Lithuania has recently launched a new regulation for Virtual Asset Service Providers (VASPs), which is set to have a significant impact on the cryptocurrency market. The new regulation aims to improve the safety and transparency of cryptocurrency transactions and prevent money laundering and other illicit activities in the sector.
The regulation consists of several parts, including licensing requirements, mandatory reporting of suspicious activities, and customer due diligence measures. However, the final part of the regulation is the creation of a Register for VASPs, which was launched in early February 2023.
The Register for VASPs is a database of all companies that provide virtual asset services, including cryptocurrency exchanges, wallet providers, and other businesses that deal with digital assets. The purpose of the register is to ensure that all VASPs operating in Lithuania are compliant with the new regulations and that they have undergone proper due diligence checks.
Currently, there are around 260 companies that have been added to this register. However, according to fintech and crypto consultancy Gofaizen & Sherle, the majority of VASPs are expected to be added to the list in the near future.
The introduction of the Register for VASPs is expected to have a significant impact on the cryptocurrency market in Lithuania and beyond. It will provide greater transparency and accountability in the sector and help to build trust between customers and VASPs.
Furthermore, the new regulation is likely to attract more cryptocurrency businesses to Lithuania, as it provides a clear regulatory framework and a level playing field for all players in the sector. This could lead to increased investment and job creation in the country's fintech sector.
However, some experts have expressed concerns that the new regulations could stifle innovation in the cryptocurrency sector and make it more difficult for smaller players to compete with larger companies. Additionally, some VASPs may choose to relocate to other jurisdictions with more favorable regulatory environments.
Overall, the introduction of the Register for VASPs is a significant development in Lithuania's efforts to regulate the cryptocurrency market. While the impact of the new regulation remains to be seen, it is clear that it represents a step towards greater transparency and accountability in the sector. We will see the result of this effort in a few months.
Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.