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Liechtenstein Bank Issues Own Crypto Stable Coin, Aims to Become ‘Blockchain Investment Bank’

Liechtenstein bank Union Bank AG announced it was issuing its own security tokens and in-house cryptocurrency backed by fiat in a press release Friday, August 17.

Union Bank, which has concentrated increasingly on blockchain this year, said issuing its so-called “Union Bank Payment Coin (UBPC)” was a further step towards becoming a “full-service blockchain investment bank.”

UBPC will act as a stable coin, the institution explained, and will have fiat currencies “such as the Swiss franc” as its backing.

“Our goal is to become the world’s first blockchain investment bank and to provide tangible solutions which help drive efficiencies, reduce cost base and open up new revenue opportunities for our customers and intermediaries alike,” chairman of the board of directors Mohammad Hans Dastmaltchi commented in the release.

“…As such, our fiat-backed Union Bank Payment Coin has the potential to disrupt the approach to international trade and international cross-border transactions.”

The news came the same week that major cryptocurrency exchange Binance launched a fiat-to-cryptocurrency exchange in the tiny European principality catering to both Swiss francs and euros.

Both Binance and Union Bank praised the jurisdiction’s pro-blockchain stance, indicating a desire to see functionality increase in time.

In partnership with Swiss blockchain advisory Verum Capital, Union Bank said it was now looking to introduce blockchain “throughout its processes and supporting technology.”

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Binance Reveals Liechtenstein-Based Fiat-To-Crypto Exchange

In a recent move, Binance has partnered with Liechtenstein Cryptoassets Exchange (LCX) to launch a partnership fittingly named Binance LCX. As per a press release posted on August 16th, the collaboration between the two entities will be launching a fiat-to-crypto portal in Liechtenstein. 

Binance’s “experienced team” will take a key role in providing and maintaining the exchange infrastructure, while Binance LCX will take the reins for customer support, legal compliance and due diligence, KYC, AML and communication with local governmental figures/regulatory bodies. The entity spawned as a result of the partnership intends to build a team of 10 to 15 individuals to support the exchange and will be situated at its Liechtenstein office.

The fiat-to-crypto exchange will offer support for Swiss Francs (CHF) and Euros (EUR), coupled with “major cryptocurrency pairs.” While the two firms have not released an extensive list of pairs, it is widely speculated that the new exchange will support BTC, ETH, and XRP at the bare minimum. The latter cryptocurrency noted may be a surprise to some, as the regulatory state of this asset is still up in the air. However, recent tweets from Michael Arrington, an XRP proponent and the co-founder of TechCrunch, and Binance CEO Changpeng Zhao have led some to believe that XRP/EUR and XRP/CHF support is likely.

The newly-established firm also noted that it will add more trading pairs as time moves on, with planned pairs being subject to regulatory approval/disapproval. Changpeng Zhao, or CZ as he is better known by the cryptocurrency community expressed his excitement for this venture, stating:

I believe Binance LCX will create a sustainable and reliable fiat-crypto gateway for professional and regular investors alike. I hope Binance LCX will drive new standards for usability and compliance for the blockchain industry, and we are very excited to bring the relevant experience and best practices to grow our team in Liechtenstein

In a similar comment, LCX CEO Monty Metzger, the primary executive at the other end of the partnership, also added that his firm is thrilled to join hands with Binance in this move. While many governments are hesitant to openly endorse cryptocurrency-related companies, individuals or ventures, Liechtenstein’s Prime Minister issued a welcoming statement and even made an appearance at the grand unveiling of the Binance LCX office.

Liechtenstein has quickly proven itself to be a “crypto haven,” with the regulatory environment surrounding this nascent asset class being rather lax. The small European country has begun to see a large influx of crypto-related companies, as some projects seek crypto-friendly banking relationships. Taking this into account, it is clear to see why LCX wrote that “Liechtenstein is the ideal location” for this new exchange.

As reported by Ethereum World News previously, Binance made a similar announcement in June, launching its first fiat-to-crypto exchange in Uganda. So although the global roll-out may be slow, it has become apparent that Binance is ready to tackle the lack of fiat support in exchanges worldwide with its own platforms.

Photo by Henrique Ferreira on Unsplash

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Binance LCX Launches Fiat-to-Crypto Exchange in Liechtenstein

Binance LCX, a joint venture between Binance and Liechtenstein Cryptoassets Exchange (LCX), has announced the launch of a fiat-to-crypto exchange, according to a press release published August 16.

The new trading platform will be located in Liechtenstein and offer trading between Swiss Francs (CHF) and euros (EUR) against major digital currencies pairs, subsequently adding more trading pairs following regulatory approvals.

Binance will provide and support the platform, while Binance LCX will lead customer support, regulatory compliance, and government communication. Adrian Hasler, Prime Minister of Liechtenstein, commented the launch:

“We are confident that Liechtenstein’s existing and future legal framework and practice provide a robust foundation for the Binance LCX and other blockchain companies to provide exceptional services here in Liechtenstein.”

Liechtenstein has taken a friendly and open stance towards cryptocurrencies and blockchain technology, echoing developments in neighbouring Switzerland known for its “Crypto Valley” in the canton of Zug.

Recently, Liechtenstein introduced a new blockchain law which provides legal and regulatory certainty for businesses and customers. In an interview with Cointelegraph, Hasler said that the country sees great potential in blockchain technologies, adding:

“Blockchain can serve as an important base for a variety of economic applications, covering not only payment transactions but broader financial solutions, industry use cases and general applications.”

In March, Liechtenstein lending institution Bank Frick began offering “direct investment” and cold storage for five cryptocurrencies; Bitcoin, Bitcoin Cash, Litecoin, Ripple and Ethereum. The service is aimed primarily at “professional market participants and financial intermediaries.” The bank’s Chief client officer Hubert Büchel claimed that their crypto-related services “are in demand from companies across the whole of Europe.“

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Liechtenstein to Avoid 'Excessive' Blockchain Regulation: Prime Minister

Blockchain technology is driving economic transformation, and Liechtenstein wants to be in the front seat, according to the country’s prime minister.

As such, the Liechtenstein government has set out to create “sensible,” comprehensive blockchain legislation to create a legal environment that’s conducive to innovation and light on regulation.

While other nations have steadily introduced blockchain and cryptocurrency-related laws, Prime Minister Adrian Hasler told CoinDesk that Liechtenstein’s forthcoming bill “goes much further than the blockchain legislation of other countries.”

“The law is intended to regulate all activities that are possible on technical systems such as distributed ledgers and blockchain systems, and thus provide legal certainty,” Hasler said. “But the law covers much more than merely the issuing of cryptocurrencies and utility tokens. The law is intended to provide the necessary legal framework for a wide range of new services and business models relating to these technologies.”

Hasler indicated that the bill, dubbed “The Blockchain Act,” will outline a careful, light-handed regulatory framework.

The prime minister explained:

“There is no point in creating regulations that are excessive and lacking in practical relevance, because then the blockchain economy will simply develop outside the regulations. That surely would not be in the interest of any country. Therefore we want to propose a sensible regulatory approach by means of this law, where the role of the state in creating legal certainty and confidence comes into effect where it is needed.”

The bill will be primarily informed by Liechtenstein’s Financial Market Supervisory Authority, which has so-far addressed over 100 blockchain and cryptocurrency-related enquiries.

‘Significant change’

Hasler further noted that the government has reviewed the legislation of other countries, and is also in consultation with variety of fintech companies, financial service providers and lawyers, with the aim of making the bill “as relevant in practice as possible.” He expects to present the bill to the public this summer.

While the timing of the legislation coincides with an industry boom, Hasler said Liechtenstein’s interest in the blockchain is not new, and the bill follows an analysis of “the opportunities and risks of a blockchain economy” by a working group that convened about 1.5 years ago.

Hasler told CoinDesk”

“It quickly became clear how the blockchain can significantly change almost all aspects of our economic life and financial services.”

Likewise, Hasler attributed the timing of The Blockchain Act to a broader attempt at “state innovation.”

“For the Liechtenstein government, it is important that the state and the authorities are themselves in a position to develop further,” he explained. “The Blockchain Act stems from this process of innovation.”

The small European country, which has a population of less than 40,000, has thus far demonstrated a growing appetite for blockchain and cryptocurrency technology.

In March, Crown Prince Alois Philipp Maria revealed that the royal family is considering investing some of its $5 billion fortune in cryptocurrencies, and suggested that the blockchain could be used to increase the efficacy of the government.

And, an early mover in its industry, Liechtenstein’s Bank Frick also announced in March that it now allows clients to invest directly in cryptocurrencies, citing demand from companies across Europe as the catalyst for its decision.

Adrian Hasler image via Wikimedia Commons

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Liechtenstein To Support Blockchain With New Regulations

The government of Liechtenstein will introduce new legislation to regulate Blockchain business models and underlying Blockchain systems, Prime Minister Adrian Hasler announced during a speech at the Finance Forum in Vaduz, Cointelegraph auf Deutsch reported March 28.

The bill will be presented in summer 2018 and is drafted so that business models based on Blockchain technology are integrated in a manner which provides legal and regulatory certainty for businesses and customers alike.

“The planned regulations will make us one of the first nations worldwide to regulate this topic this broadly, laying the groundwork for extensive economic applications”, said Hasler during his speech at the Finance Forum in Vaduz.

Hasler acknowledged the diversity of applications for Blockchain technology, saying, “[It’s] not just for cryptocurrencies like Bitcoin, but has several other [uses].” Other assets such as property, cars, music licenses, or securities might also be traded via Blockchain technologies in the near future. Hasler predicts that large shares of economic processes and financial services will be conducted using Blockchain trading and service systems. Governmental support for innovation is seen to be a strategic success factor.

Neither the trade of digital currencies nor their usage as a payment method are currently covered by special licensing requirements. The Financial Market Authority of Liechtenstein (FMA) has only published two brief booklets on cryptocurrencies and ICOs.

The Principality of Liechtenstein, whose alleged tax evasion schemes and anonymous deposits make it an ideal tax haven, has become a major financial hub in Europe. The small state is expected to play an important role in the fintech industry as well. Earlier this month the Liechtenstein-based credit bank Frick announced it now offers direct investments and cold storage for five cryptocurrencies.

Liechtenstein is taking inspiration from nearby Switzerland, whose canton of Zug has become known as “Crypto Valley”, attracting several fintech corporations to locate and do business in the area.

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The Crown Prince of Liechtenstein Wants to Invest in Crypto

There may be a literal “crypto-king” one day in the not-so-distant future. The Crown Prince of Liechtenstein said last Friday that his family is considering investing some of their $5 billion fortune in cryptocurrencies.

Crown Prince Alois Philipp Maria told CNBC that investing in cryptocurrencies can help bolster the royal family’s fortune, which, though it is sizeable now, was much reduced after World War II.

“Particularly this whole new digital economy, it is something to look into more into the future,” he said.

Despite this interest, the Crown Prince went on to say that his family currently lacks “the internal expertise” to invest directly in crypto, and that he was unsure about the future of cryptocurrencies in general, explaining:

“I think we would rather do that or are currently doing that through our general exposure via private equity, venture capital funds where we are investing. Where cryptocurrency will move to, I think that’s very open still. So I think one has to really see that it’s a very risky asset class.”

As for blockchain, Alois is more bullish.

“I think particularly the whole blockchain technology is very interesting … blockchain will change a lot of areas, a lot of businesses in the future.”

He also suggested that his government could potentially utilize the technology, saying that “I think the attractive elements of blockchain technology could be used to make the state more efficient in the way it’s administered.”

The royal family is not the only party in Liechtenstein, a small country situated between Austria and Switzerland best known for its low corporate tax rates, to be interested in cryptocurrencies and blockchain.

Bank Frick, a family-run institution located in the town of Balzers, announced in early March that it now allows clients to invest directly in cryptocurrencies including bitcoin, bitcoin cash, litecoin, XRP and ether. The bank’s announcement cited demand from companies across Europe as the impetus for its decision.

Liechtenstein flag image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Liechtenstein Bank Opens Up Cryptocurrency Investment for Clients

A Liechtenstein-based family bank has become one of the first banks in the world that allows clients to directly invest in cryptocurrencies.

Making the announcement earlier this week, Bank Frick said that the first batch of cryptocurrencies to be available for trading will include bitcoin, bitcoin cash, litecoin, Ripple and ether. The bank said it is targeting institutional and high-value private clients, who can buy in with euros, U.S. dollars and Swiss francs.

The crypto assets under the bank’s custody, the announcement says, will be stored in cold wallets – a security measure that keeps private keys to the cryptocurrencies offline and away from potential hackers. Trading activities through the bank’s platform will also be carried out in compliance with know-your-customer procedures required under Liechtenstein and European (EU/EEA) law.

“Clients can only invest in cryptocurrencies once they have been fully identified and verified. The verification and identification process also involves checking the origin of the money used to invest in them,”according to the announcement.

“Our services are in demand from companies across the whole of Europe,” said Hubert Büchel, chief client officer at the bank. “We aim to place crypto-banking on at least the same level of quality as traditional banking.”

The move marks the latest effort among financial institutions in the region to move to support the growth of cryptocurrency and blockchain development.

As reported by CoinDesk, Falcon Group, a Swiss private bank, has also started offering a bitcoin purchasing service through clients’ traditional accounts in partnership with the bitcoin brokerage firm Bitcoin Suisse AG.

Bank Frick image via Wikimedia Commons

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Liechtenstein’s Bank Frick Introduces ‘Direct’ Cryptocurrency Investment And Cold Storage

Liechtenstein lending institution Bank Frick now offers “direct investment” and cold storage of five cryptocurrencies, it announced in a press release Feb. 28, noting it is the “first” financial instituion in the country to do so.

Aimed primarily at “professional market participants and financial intermediaries,” according to Frick, investment and storage is offered for Bitcoin, Bitcoin Cash, Litecoin, Ripple and Ether.

The bank, which was founded in 1998, has sought to stand out from competition in the tiny European country, introducing a crypto investment and storage service that is “in demand” beyond its borders, it says.

“Our services are in demand from companies across the whole of Europe,” chief client officer Hubert Büchel commented in the release. On the perceived benefits of dealing with crypto through a bank, Büchel continued:

“This is because they know that we can offer them reliable support in implementing their business models with cryptocurrencies and blockchains in line with the existing regulatory framework.”

Despite Bank Frick being previously active in crypto-based products, the move appears to copy neighboring Switzerland, where institutions Vontobel and Falcon Private Bank have been offering exposure to crypto investments since as far back as 2016.

Elsewhere in Europe, The Netherlands’ Rabobank this month hinted it may shortly begin offering cryptocurrency storage for cardholders via a product called ‘Rabobit.’ A dedicated website about the project has appeared, though staff have also noted on social media that a final decision on its release has yet to be made.