Liechtenstein, a tiny European nation nestled between Switzerland and Austria, has approved the use of Bitcoin to pay for specific state services.
The Prime Minister and Finance Minister of Liechtenstein, Daniel Risch, announced the news in an interview with German business daily Handelsblatt on Sunday. This bold move comes as many countries around the world are still grappling with how to regulate the use of cryptocurrencies.
Liechtenstein Embraces Bitcoin
In the interview, Risch revealed that the country plans to accept Bitcoin deposits and exchange them immediately for Swiss francs, Liechtenstein’s national currency. While he did not give a specific timeline for the implementation of the new payment option, Risch expressed support for this movement.
According to the Prime Minister, cryptocurrencies such as Bitcoin are still too risky. “But this assessment can of course change.” He added that the country’s reserves, which are primarily invested in the capital market, currently amount to 2.23 billion Swiss francs, and that he is open to investing state reserves in Bitcoin in the future.
“We are not taking any big risks with state money, but we are always open to new ideas and possibilities,” Risch said in the interview.
While the United States has shown a keen crackdown on crypto and anything related to it, Liechtenstein has taken a progressive approach and embraced the potential benefits of the technology behind it — the blockchain. Liechtenstein’s decision to allow Bitcoin payments for state services is a significant step towards the mainstream adoption of crypto.
Meanwhile, other countries worldwide have also been adopting Bitcoin and other cryptocurrencies over the past years. In 2021, El Salvador became the first country to adopt Bitcoin as a legal tender.
In the same year, Ukraine legalized cryptocurrency and allowed exchanges to operate in the country. The Mayor of Miami, Francis Suarez, also announced that the city would begin accepting tax payments in Bitcoin and other cryptocurrencies.
Regulatory Status In Europe
Liechtenstein’s decision to accept Bitcoin payments for specific state services indicates a growing trend across Europe. In the past years, several European countries have taken steps to regulate cryptocurrencies and provide a clear legal framework for their use.
For example, On April 20, the European Parliament adopted a regulatory framework for crypto, known as the Markets in Crypto-Assets (MiCA) regulation. The new legislation aims to provide greater legal certainty and consumer protection for individuals and businesses engaging in crypto-related activities.
Besides MiCA, other European countries have also adopted various approaches to crypto. For instance, Germany recognized Bitcoin as a legal currency back in 2013, while France has established a regulatory framework for initial coin offerings (ICOs).
Despite the growing acceptance of cryptocurrencies across the world, there is still a lack of consensus on their regulatory status. Some countries, such as Malta and Switzerland, have embraced digital currencies and created favorable regulatory environments for blockchain businesses.
Others, such as Russia and China, have taken a more cautious approach and have placed restrictions on cryptocurrency trading and mining.
Regardless, Bitcoin has maintained composure to some extent amid regulatory uncertainty. Over the past 24 hours, the top crypto has only dropped by 3.7% with a trading price of $27,876.
Featured image from Shutterstock, Chart from TradingView
