As one of the leading FinTech countries in Europe, Lithuania is quickly becoming a destination for startups and other tech companies around the world.

The country has become a digital model since 2020 by achieving a 320% growth in FinTech over the last eight years. The field is currently overseen by the Financial Crimes Investigation Service (FCIS) under the Ministry of the Interior of the Republic of Lithuania, which provides digital support to businesses in sectors such as technology, law and finance.

So what does the Baltic state offer that differentiates it from the rest of the EU? And why do a large number of virtual asset service providers (VASPs) continue to choose Lithuania over countries such as Malta and Estonia, which also offer the possibility to obtain crypto licenses?

The answer is simple – efficiency. Vilnius, the capital of Lithuania, is a fast-growing technology hub. This is due to the fact that they responded quickly to the needs of market players, and while other countries have introduced stricter regulations that made it more difficult for FinTech companies to obtain crypto licenses, Lithuania has created a financial ecosystem that offers a smooth transition for new startups. This is why firms such as Google, IBM, Binance, Kraken and Blockchain.com are now present in Lithuania.

About the license

Lithuania provides authorisation for two types of crypto-related activities for operations with virtual currencies:

• Crypto wallet service – which means sending and receiving, managing and protecting cryptocurrencies using encrypted keys for a third party or business.

• Cryptocurrency exchange service – which includes services related to the buying and/or selling of cryptocurrencies, as well as the conversion from fiat to cryptocurrency or vice versa, and from crypto to crypto.

The European regulation of Markets in Crypto Assets (MiCA) that is currently being developed, will introduce a harmonised crypto asset regulatory framework across Europe. The Lithuanian national regulation on virtual assets – currently considered the most favourable in the European Union – will allow the provision of crypto asset services in the European market.

Inlock’s ambition is to strengthen its position first in the European market and then beyond the borders of the EU. It is essential to constantly keep an eye on the legal framework and to create the most adaptive and responsive legal compliance environment possible.

If you want to learn more about the crypto regulations, click to read our blogpost about it or you can read about our Lithuanian Background here.