Liechtenstein wants to create a legal framework that will offer certainty for tech companies with its new Blockchain Act, which aims to promote the development of a token economy as the race to bank crypto wealth gains speed.
According to prime minister Adrian Hasler, it is important for the state to provide companies clarity about "what is possible and where the concrete boundaries lie".
This is what Liechtenstein aims to achieve with its new Blockchain Act. As Hasler explains, this is not simply about the financial sector: while blockchain can be used to digitally represent securities, it can also be used for rights of use to vehicles or licensing rights to intellectual property.
"These application fields, which in principle encompass the entire economy, are usually summarized under the term ‘token economy'," Hasler wrote in an article in the daily newspaper Neue Zürcher Zeitung.
Liechtenstein now wants to promote the token economy with its new law. By introducing the token as a new legal entity, Liechtenstein is creating an instrument with which any right from the analogue world can be represented digitally. In Hasler's opinion, this is one of the most important innovations of the planned Blockchain Act.
Liechtenstein has set out to become Europe's blockchain hub. Crown Prince Alois has announced his plans to transform the country into the place-to-be for blockchain businesses.
However, neighboring Switzerland has its own ambitions to become Europe's Crypto Nation. The canton of Zug is home to Switzerland's "Crypto Valley" where blockchain powerhouses such as Ethereum, ShapeShift, Xapo, Tezos, Melonport, and Monetas have established a presence.#
In December 2018, the French Government has issued a decree outlining asset tokenization and the use of blockchain in securities management.
Specifically, the "use of a shared electronic recording device for the representation and transmission of financial securities and for the issue and sale of minibonds."
The decree follows up on a previous statement posted by the Minister of the Economy and Finance in May of 2018. This statement had the purpose to "make the registration of an issue or transfer of financial securities in a blockchain the same as the book-entry of financial securities."
Malta has also devised a blockchain legal framework even as most regulators in Europe have not put much effort into creating blockchain industry regulations over the past years.