Estonia, one of Europe’s most crypto-friendly nations, plans to tighten its licensing regime for cryptocurrency companies. The financial authorities in Tallinn want to introduce stricter regulations for fintech businesses registered in the Baltic country.
Regulators to Increase Oversight
The Financial Intelligence Unit, the Estonian regulator issuing the licenses, has made a number of proposals to strengthen the rules for entities dealing with digital assets. The Ministry of Finance is currently preparing draft amendments to the country’s Anti-Money Laundering and Counterterrorist Financing Law, the local news outlet Äripäev reported.
The revisions will be presented to the Council of Ministers for approval and then filed in the Estonian parliament for adoption. The ministry believes the anti-money laundering bureau should be tasked with inspecting all companies that provide services in the sector. The monitoring of their activities should ensure they are stable and maintain impeccable reputations.
Once the new regulations are adopted, crypto businesses registered as Estonian legal entities will be required to keep their headquarters in the country. Companies registered in foreign jurisdictions will be obliged to establish subsidiaries in Estonia.
The upcoming changes have been announced a year after the new Estonian Money Laundering and Terrorist Financing Prevention Act came into force. The act transposed into national law the provisions of the 4th Anti-Money Laundering Directive of the European Union, of which Estonia is a member.
Estonia is a trailblazer in Europe when it comes to adopting favorable regulations for the cryptocurrency industry. The small Baltic nation became the first country to introduce a licensing regime for companies in the sector. Many crypto businesses have been attracted by the opportunity to operate legally within a European jurisdiction.
Since the adoption of the regulatory framework last year, the Financial Intelligence Unit has licensed close to 1,000 entities. The regulator issues two types of licenses. According to data quoted by the Estonian news outlet Err.ee, 444 wallet providers and 526 cryptocurrency trading platforms are currently licensed to operate in the country.
Estonia is known for its developed e-government infrastructure and unique e-residency program, which provide private individuals and corporate entities with access to fast and efficient services. As news.Bitcoin.com reported recently, the application process for a crypto license takes only about two weeks. Meeting a number of know-your-customer and anti-money laundering requirements is an important precondition for approval.
Estonia is one of several jurisdictions spearheading the adoption of crypto-friendly laws and rules in Europe, along with Switzerland, Belarus, Malta, Gibraltar and the Isle of Man.
What are your expectations about the future of crypto regulations in Estonia and Europe? Share your thoughts in the comments section below.
Images courtesy of Shutterstock.
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