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Liechtenstein creates role of token loan company”
Liechtenstein creates regulation for staking and lending in the blockchain law. Find out how the new legislation is pioneering and improving customer and site protection. Find out what staking and lending are and why this development is encouraging.
Liechtenstein creates role of token loan company”
Liechtenstein has introduced a new service provider role called “token loan company” in the Blockchain Act (TVTG) to ensure customer protection and provide greater legal certainty. This regulatory development is intended to continue to position Liechtenstein as a pioneer in blockchain regulation and to show other states and the EU Commission a possible regulatory path. The protection of customers and the reputation of Liechtenstein as a location should be protected from risks by taking regulatory measures at an early stage as long as there is no uniform regulation in the European Economic Area.
The Liechtenstein legislature has innovatively and consistently developed the Blockchain Act in light of the market development of the blockchain industry in recent years. Registration in accordance with the Blockchain Act (TVTG) is now required for staking and lending in Liechtenstein. A conscious decision was made not to subject these services to banking law with its high capital requirements.
Staking is a validation mechanism for blockchains such as Ethereum, Solana and Cardano that are based on “Proof of Stake”. Crypto holders can deposit their crypto assets in a special wallet through staking and generate returns. The token loan company enables staking and lending under certain conditions to ensure a liberal economic order and protect customers from losses or failure of the service provider. The regulation aims to meet specific requirements of the new technology and prevent the misuse of customer tokens.
The decision to place staking under the Blockchain Act and not the Banking Act is viewed positively as capital requirements can be regulated independently and moderately. The Trustless Technologies Association in Liechtenstein supports the area of blockchain and cryptocurrencies and ensures quality and distribution in Liechtenstein and beyond. Thomas Nägele, Managing Partner of Nägele Rechtsanwälte GmbH in Vaduz, plays an important role in promoting these technologies and as Chairman of INATBA.