Estonia is one of the first countries to widely support and approve a cryptocurrency industry in its country. The country has already issued 500 cryptocurrency licenses, at least according to news outlet Bitnovosti, which quoted Nikolay Demchuk, an attorney who works in the cryptocurrency sector.
Demchuk’s law firm, Njord, released a report concerning cryptocurrency licenses in Estonia. The firm gathered and analyzed data from Estonia’s Registrar of Economic Activities. In the report, it discussed that the process for obtaining a cryptocurrency license is straightforward and easy.
In respect to the process, the Estonian Financial Intelligence Unit indicates that regulators issuing licenses have thirty days to review applications. Even though the timeframe is thirty days, it usually takes about fourteen days to receive approval – or denial. The authority can also revoke licenses if a company does not use the license within six months to begin operations. Once a crypto-entity is registered, it must follow anti-money laundering regulations and they must follow EU standards as well because they are operating within the EU.
Even though Estonia has approved cryptocurrency business, there are still challenges for such platforms, particularly in relation to the banking industry. Many banking services are uncertain about providing cryptocurrency companies with services.
For example, Demchuk stated,
“Open a bank account is the biggest problem facing crypto companies. Estonian banks are not yet ready to serve clients operating with cryptocurrency.”
Despite the challenge, many are still going forward with operating in Estonia. The amount of cryptocurrency platforms in the country has been increasing on a monthly basis. Three major platforms, Ibinex, Ironx, and B2bx have bad their applications approved within the last three months.
With licensing comes oversight, of course. Estonia recently established the Estonian Money Laundering and Terrorist Finance Prevention Act. Demchuk mentioned that the legislation enables the country to be the first in the EU to regulate cryptocurrency. The country itself may be moving toward releasing an Estonian Digital Token for transactions concerning the country’s e-residency process. Those who come to the country to live can be issued digital identification card that allows them to receive benefits within the country.