Keeping a Grip on Blockchain

Prime Minister Adrian Hasler outlined his vision for Liechtenstein’s future as a leader in the world of blockchain financial systems by announcing new regulations on blockchain systems at the Finance Forum Liechtenstein. Hasler also discussed ‘Finance 2.0’ and the steps necessary to prepare Liechtenstein’s financial services industry for the future with the sold-out crowd of 600 global policymakers in Vaduz. Hasler also noted that while new technological capabilities provide great benefits, they are not a panacea, emphasizing the importance of gaining the trust of banks’ customers.

Prime Minister Adrian Hasler

Blockchain is a form of cryptographic data that acts as its own ledger when shared over a peer-to-peer network. Each “block” of a blockchain displays important information about user actions that impacted it. Due to its decentralized and self-describing nature, blockchain data cannot be misrepresented or hacked. These factors have led to blockchain emerging as the basis for cryptocurrencies, which favor it for its security and secrecy.

The government of Liechtenstein will introduce new regulations this summer stipulating standards for blockchain business models and their underlying blockchain systems. The Prime Minister explained that “the planned regulations will make us one of the first nations worldwide to regulate this topic on a broad basis and lay the foundation for its extensive economic applications.” Prime Minister Hasler also noted that this regulation is necessary due to blockchain’s decentralized nature, which has enabled various emerging uses for blockchain systems. These uses extend far beyond currencies such as Bitcoin, including uses for the exchange of cars, properties, and securities. Prime Minister Hasler explained that the new legislation will go “much further than the blockchain legislation of other countries.” This summer’s “Blockchain Act” will provide the framework necessary to regulate and enable a “wide range of new services and business models relating to these [blockchain] technologies,” according to the Prime Minister. The government considers state innovation promotion to be a factor which will play into the successful implementation of blockchain technology in Liechtenstein.

H.S.H. Hereditary Prince Alois of Liechtenstein told the media that digital currencies are an issue worth investigating further in the future. He even remarked that in the future, many of the government’s administrative tasks could utilize blockchain technology. While there are currently no financial incentives for using cryptocurrencies, the government is working to ease its integration into business models.