On October 3, 2019, the parliament of Liechtenstein (Landtag) unanimously voted for
Token- und VT-Dienstleister-Gesetz or the Token and Trustworthy Technology Service Providers Act (the Act).
It will come into force in January 2020.
With the new law, Liechtenstein is the first country to have a comprehensive regulation of the token economy. As it seems, the Act might be considered as a blockchain-friendly legal framework because it leads to a “Token Container Model—TCM” which means that any token transactions, including cryptocurrency (i.e., money), securities, rights to real estate, rights to assets, license rights, and rights of use will be fully covered by the existing legal provisions. In other words, all kinds of assets and rights might be “tokenized” but only in case of compliance with the required domestic standards on client and asset protection.
The term “token” is defined as “a piece of information on a TT [Trustworthy Technology, TT] System which can represent claims or rights of memberships against a person, rights to property, or other absolute or relative rights, and is assigned to one or more TT identifiers”. At the same time, the term “TT identifies” includes “an identifier that allows for the clear assignment of Tokens” whereas the term “Trustworthy Technology” is interpreted as “technologies through which the integrity of tokens, the clear assignment of tokens to TT Identifiers and the disposal over tokens is ensured”.
The status of tokens is legally recognized due to the provisions of the Act. Besides, they contain the clear demands on transfer, disposal and cancellation of tokens.
It should be mentioned that the Act formulates the requirements to domiciled persons if they are covered by the term “TT Service Provider” including token issuers, token depositary and others. For example, there are rules on registration, activity and supervision and even the minimum capital in some cases (from CHF 50 000 to CHF 250 000 depending on the functions). Additionally, the Act includes measures to combat money laundering by making service providers subject to AML/CFT rules.
New domestic legislation is not applicable to service providers domiciled abroad and who render Trustworthy Technology services for persons resident in Liechtenstein.
