It’s more than one year since the Estonia government implemented licensing for all companies which are operating within the cryptocurrency sector and since then cryptocurrency license in Estonia has been issued to more than 900 entities. The authorities have implemented a progressive approach which is meant to regulate the crypto space. However, many small start-ups have in many cases complained that the local banks have remained reluctant in giving them these services regularly.
Estonia is one the first the member states of the EU which took a step in legalizing crypto-related activities and it grants 2 cryptocurrency licenses in Estonia. Currently, the entities which are operating under digital asset exchange have been able to get about 700 licenses.
During 2017 and 2018 we have assisted to get more than 100 cryptocurrency licenses in Estonia for our customers.
Cryptocurrency licenses in Estonia
Recently we published to our subscribers a report about an overview of the situation about the Estonian cryptocurrency licenses. According to this report, the idea of getting a cryptocurrency license in Estonia was a relatively simple and straightforward process.
The regulator issuing the licenses and the Financial Intelligence Unit in Estonia has about one month of reviewing every application, however, in many cases, an application will be granted within 2 or 3 weeks. This licenses may be revoked in case the company does not start its operations within 6 months of getting it.
Some of the other requirements are: The business must meet all requirements from anti-money laundering and knowing your client regulations. All the crypto entities which are registered in Estonia are regarded to be operating legally in the European Union since this country is one of the member states. The licenses issued are required to comply with relevant European and local laws.
Operating a bank account still a problem but we have solution
Just like other states where the authorities have been attempting to create a crypto friendly environment, banks is ones of the traditional institutions in Estonia which has been slow in catching up with regulators. They’ve been hesitant in responsing to the requirements of the nascent industry. One of the major challenges for the Estonian fintech businesses is restricted access to regular banking services. Many of the business have opted to work with payment providers and foreign banks.
Currently we have special offer for those companies: current account in the UK and merchant account in Latvia. This solution might be implemented just within couple weeks. Please feel free to contact our specialists.
Despite that many investors in Estonia have been moved by the favourable conditions which are offered in this country. This country has been able to issue licenses to so many crypto startups. For instance, at the start of June, the regulators were able to grant licenses for exchange and wallet service for the trading platform known as Coinmetro. Towards the end of that month, an Ibinex, company which develops white label solutions and trading software was able to obtain a license so that they could operate their business from Estonia. Later, in September FIU was able to approve applications which were filed by B2bx and Ironx, the new cryptocurrency exchanges in Estonia.
Achievements and plans
It’s about one year ago since the Act was initiated. This particular legislation has made it possible for Estonia to be the first state in the European Union which has regulated the cryptocurrencies circulation. It has also implemented the licensing strategies for all the companies which are operating in this area.
A few months ago, Republic of Estonia made some plans of issuing its own cryptocurrency known as Estcoin. Due to the pressure from the EU institutions, it was forced to abandon this idea. The European Bank is the one which gave the strongest criticism. Mario Draghi who is the president, stated last year that no member of this union could be given a mandate of introducing its own digital currency.
During this summer, it has been revealed that the Estonia government is planning to proceed with a small scale project of issuing an Estonian digital token. In this case, the crypto can be used for transactions involving members in the electronic residency program of the countries. Since then, many foreign citizens have been granted with unique digital ID cards which allows them to take the opportunity of the numerous benefits which the Estonia government offers. This can be seen from preferential taxation and simplified procedures of establishing a business entity.