Stablecoin issuer / redeemer in Liechtenstein

Token and TT Service Provider Act (TVTG) (Gesetz über Tokens und VT-Dienstleister – Blockchain Act): This foundational law defines tokens, establishes principles for DLT-based systems (VT Systems), and regulates service providers operating within them.

E-Money Act (EMoG) (E-Geld-Gesetz): Implements the EU E-Money Directive, regulating the issuance of electronic money. This is highly relevant for fiat-backed stablecoins.

Payment Services Act (ZDG) (Zahlungsdienstgesetz): Implements the EU Payment Services Directive (PSD2), regulating payment services.

FMA Guidance on Classification: The FMA provides specific guidance on the classification of tokens, which is crucial for determining the applicable regulatory regime.

Definition (EMoG): Most fiat-backed stablecoins are classified as e-money if they meet the definition: "electronically stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions... and which is accepted by a natural or legal person other than the e-money issuer."

Implication: This classification triggers the strictest regulatory requirements, including robust reserve and safeguarding rules, and an e-money issuer license.

Payment Tokens (under TVTG):

Interaction with E-money: While a fiat-backed stablecoin might be a "payment token" in function, if it fulfills the e-money definition, it will primarily be regulated as e-money under the EMoG. The TVTG would then primarily regulate the underlying VT system and specific TT service providers (e.g., TT Exchange Service Providers).

Securities (under TVTG or traditional securities law):

1:1 Backing: E-money issuers are required to safeguard all funds received in exchange for e-money. This means maintaining a 1:1 backing of the e-money issued with corresponding assets (typically fiat currency).

Segregation: These funds must be held in segregated accounts at credit institutions or invested in secure, low-risk assets (e.g., government bonds) that are also segregated and cannot be used by the issuer for other operational purposes.

FMA Supervision: The FMA oversees compliance with these safeguarding requirements.

E-Money Issuer License (under EMoG):

Regulator Name: Financial Market Authority (FMA) Liechtenstein

Token and VT Service Provider Act (TVTG) / Blockchain Act:

Definition under TVTG: A "VT Exchange Service Provider" is a person who facilitates the exchange of VT Tokens against fiat currencies or other VT Tokens. This covers traditional cryptocurrency exchanges.

VT Protector: A person who holds VT Tokens in its own name for the account of a third party (client).

VT Payment Service Provider: The TVTG explicitly defines a "VT Payment Service Provider" as a person who provides payment services involving VT tokens or virtual currencies.

Due Diligence Act (DDA) (Sorgfaltspflichtgesetz):

Definition of TT Custodian: According to Art. 4 para. 1 lit. e TVTG, a TT Custodian is "a service provider who holds tokens in custody for third parties and provides services for the safeguarding of private keys or other means of access to tokens."

Licensing Process: Any entity wishing to act as a TT Custodian must obtain prior authorization from the FMA. The requirements for obtaining a license as a TT Service Provider are outlined in Articles 12-17 of the TVTG and include:

Minimum Capital Requirements: As per Art. 17 TVTG, TT Service Providers, including TT Custodians, must have a minimum capital of CHF 100,000. The FMA may require higher capital based on the scope and risk of the services provided.

Duty of Care Regarding Third-Party Tokens: Art. 23 TVTG stipulates that a TT Custodian must take all necessary measures to protect the tokens against loss, theft, or misuse, and to ensure that they can always be identified and returned to the respective owner.

Identification and Return: This implicitly requires that the custodian must be able to clearly distinguish client assets from their own assets and from the assets of other clients. In practice, this leads to the implementation of technical and organizational measures for segregation, such as separate omnibus wallets per client or a sophisticated internal ledger system that tracks individual ownership within shared wallets, coupled with a robust reconciliation process.

Insolvency Protection: The segregation of client assets ensures that in the event of the custodian's insolvency, client assets are not part of the insolvency estate and can be returned to their rightful owners.

MiCA Implementation: MiCA is a comprehensive EU regulation for crypto-assets that will become fully applicable in phases, with most provisions for crypto-asset service providers (CASPs) applying from December 30, 2024.

Law on Professional Due Diligence for the Prevention of Money Laundering, Organised Crime and Terrorist Financing (Due Diligence Act, Sorgfaltspflichtgesetz - SPG): This is the overarching AML/CFT law that sets out the due diligence obligations for all financial intermediaries, including VASPs.

Ordinance on Professional Due Diligence (Sorgfaltspflichtverordnung - SPV): This ordinance provides detailed implementing provisions for the Due Diligence Act.

Law on Token and Trustworthy Technology Service Providers (Token and TT Service Provider Act, TVTG - commonly known as the "Blockchain Act"): This groundbreaking law defines and regulates various TT (Trustworthy Technology) service providers, which largely encompass VASPs. It explicitly brings these entities under the scope of the Due Diligence Act (SPG) for AML/CFT purposes.

Identification and Verification of the Customer and UBO:

For natural persons: Obtain and verify the identity of the customer by requiring official identification documents (e.g., passport, national ID card) and verifying their name, date of birth, nationality, and residential address.

For legal entities (companies, foundations, trusts): Obtain and verify the entity's name, legal form, registered address, registration number, articles of association, and the identities of directors/executives. Crucially, VASPs must identify and verify the Ultimate Beneficial Owner (UBO), which typically means identifying any natural person who directly or indirectly owns or controls 25% or more of the entity, or otherwise exercises control.

Screening: Customers and their UBOs must be screened against national and international sanction lists (e.g., UN, EU, OFAC) and politically exposed persons (PEP) lists.

Understanding the Purpose and Intended Nature of the Business Relationship:

Source of Funds (SoF) / Source of Wealth (SoW):

VASPs must continuously monitor the business relationship, including transactions, to ensure that the activities are consistent with their knowledge of the customer, their business, and risk profile.

General Corporate Tax Rate: Liechtenstein applies a flat corporate income tax rate of 12.5% on net taxable profit.

For Businesses (Corporate Income Tax):

Wealth Tax: Cryptocurrency held as private wealth is generally subject to Liechtenstein's wealth tax. This is an annual tax on an individual's total net assets (assets minus liabilities) and is typically a low percentage (e.g., 0.1% to 0.4% per year, depending on the municipality and total wealth). The value for wealth tax purposes is the fair market value (FMV) at the end of the tax year.