TALLINN - Representatives of the Estonian Ministry of Finance met on Thursday with Estonian and international representatives of the cryptocurrency community to discuss the situation in the sector and planned legal amendments.
"Blockchain and crypto assets are becoming increasingly popular and widely used. Estonia has always supported the development of the technology sector and we will continue supporting it, but if a large number of players enter the field with their data and real money, it is important that risks be kept to a minimum. For example, anonymous crypto payments can facilitate money laundering and a seemingly modern project for raising funds may turn out to be a pyramid scheme instead," deputy secretary general Evelyn Liivamagi said in a press release.
Liivamagi noted that the introduction of crypto assets, blockchain and other innovative technologies also requires adequate regulation to prevent excessive risks in their use and ensure a business environment offering equal opportunities to all market participants. On the other hand, it is also important to avoid over-regulating the sector, she said.
"The rest of the world is also facing similar challenges; at the EU level, the regulation of markets in crypto assets (MiCA) is about to be completed, and we're also drafting our own law based on it. The regulation of crypto assets is also addressed vigorously outside the EU, including in the United States, where major scandals have erupted in relation to crypto platforms," Thomas Auvaart, deputy head of the financial services policy department at the ministry, said.
Estonia is among the first states in the EU to regulate crypto assets, according to the ministry. The requirements for virtual currency providers adopted in 2017 are primarily based on the prevention of money laundering, and the corresponding supervision is carried out by the Financial Intelligence Unit (FIU). However, the new regulation regarding crypto assets will be more focused on investor protection. For example, standardized rules will be provided for the publication and preparation of crypto prospectuses or "white papers". In terms of oversight, the Financial Supervision Authority will take over the baton from the FIU and will start issuing operating permits in the field in the future.
Auvaart added that with regard to the transposition of MiCA, several consultations are planned with market participants over the coming few months and the plan is to submit the corresponding bill to the government and parliament this fall so that the amendments can enter into effect in 2024.
On May 9 to 10, the international crypto community event NFT Tallinn took place in Estonia. The crypto community organization leading this event, the Estonian WEB3 Chamber, together with industry representatives from the United States and other foreign countries, met on Thursday with representatives of the Ministry of Finance, the Financial Supervision Authority and Financial Intelligence Unit.