Lithuania crypto regulation

Conditions of Lithuania crypto regulation

In the present world, the impact of cryptocurrencies on numerous economic and social activities is growing every day.

The international community as a whole and individual States’ agendas are becoming more and more crowded with concerns pertaining to various facets of the phenomena. As a result, there is no agreement on whether or not cryptocurrencies are lawful.

In this sense, different legal systems see digital money as a medium of trade or of payment. It should be emphasized that tokens’ legal status is not clearly specified either.

Particularly, they are frequently seen as a gift or contribution, which in turn sparks a great deal of debate on a national and worldwide scale.

Function of Lithuania crypto regulation

Since cryptocurrencies are currently widely utilized and growing quickly, the term “capitalization” — which refers to the total value of all coins in circulation — has been used to describe the market’s overall status. Instead of a central bank, as is the situation with fiat money, a community of users employing collectively created cryptographic protocols performs the regulatory function for cryptocurrencies. Anyone may utilize this decentralized technology without restriction because the source code is frequently open. Cryptocurrency exchanges ought to be subject to the same regulations as traditional ones. Exchange services must to be licensed and recognized as financial service providers.

Key point

Comparing bitcoin to money rather than an electronic payment method is more appropriate. Regardless of the amount of miners, transaction costs are separately set by users, and the network load controls the minimum commission.

Users that wish to fast confirm the transaction have the option of raising the commission.

The importance of Lithuania crypto regulation

Market manipulation is an issue in the bitcoin market, just like it is in the traditional securities market. In general, it refers to the purposeful establishment of a false pricing for a good, asset, or form of money. Due to manipulation, unregulated cryptocurrency exchanges that link fiat cash and cryptocurrencies cause investors to lose money. Unlike conventional stock or commodities exchanges, certain cryptocurrency exchanges may not follow user identification rules because they are registered in separate countries in many circumstances. Even without a formal legal body, they can function. These international exchanges enable money-laundering schemes and unrestricted cross-border money transfers in the absence of regulatory scrutiny.