It has not been a year since Estonia started licensing cryptocurrency companies, and the number of licensed companies has already exceeded 900. The authorities of a small Baltic country follow a progressive approach to crypto sphere regulation, but startups complain that local banks are still reluctant to go for cooperation.
Estonia has become one of the first jurisdictions in the EU to legalize the work of the crypto sector. There are two types of licenses in the country. Approximately 500 cryptocurrency exchanges received the first type of licenses, another type of license – cryptocurrency wallet operators, which number is more than 400 now.
According to the Njord resource report, which is based on data from the register of economic activities in Estonia, the process of obtaining a license is quite simple. Estonian financial intelligence, which regulates the issuance of licenses, officially considers the application within 30 days, but as a rule, a good is given after a week or a couple of weeks. The license is revoked if the company that received it does not start operations within six months after receipt.
The main requirement for business is compliance with the laws on verification of customer identities and the fight against money laundering. The cryptocurrency structures registered in Estonia work legally in the EU countries of which Estonia is a member, and the license obliges the company to comply with European laws as well.
As in other countries where the authorities are trying to create a cryptocurrency-friendly atmosphere (for example, in Switzerland), traditional financial institutions in Estonia do not keep up with regulators and are unable to adequately respond to the growing demand from the young industry. Limited access to banking services remains the main obstacle for the Estonian Fintech business. Many local companies are forced to work with foreign banks and payment services.
However, the process of issuing licenses by crypto sector companies continues. So, in early June, the Coinmetro cryptocurrency marketplace received a work permit. In the same month, Ibinex, a software and white label development company, began work. In September and this week, the regulator approved bids from two new crypto-burgers – Ironx and B2bx.
The new Estonian law on combating money laundering and the financing of terrorism came into force almost a year ago. In the past, Estonia even planned, at a certain stage, to release its own cryptocurrency Estcoin, but Tallinn refused this project, giving up to the pressure of EU institutions.
This summer, it became known that the government intends to issue a limited number of Estonian digital tokens for transactions among the participants of the e-residency program. Tens of thousands of foreign citizens have already received special identity cards, allowing them to enjoy the many advantages of local legislation, from the simplified procedure for creating a company to preferential taxation.