The Liechtenstein Government is very open to financial innovation and consequently also to cryptocurrencies. To demonstrate this, in the year 2016 the Government founded a working group that has developed a draft “Blockchain Act” over recent months. Despite the fact that the precise wording of the law has not yet been published, it is already apparent that the new law aims to offer the best-possible conditions for a token economy as an expression of trustworthy financial technologies. In this conjunction, the law is not limited merely to cryptocurrencies, but instead covers any possible tokenisation of assets as well as further innovations that go beyond blockchain technology. Within this context, the Liechtenstein Government is keen to create fertile conditions for cryptocurrencies as well as associated TGEs.
As in Austria and Switzerland, Liechtenstein defines money and monetary assets to mean not just legal tender (bank notes as well as coins in the respective currency), but also book-entry money. This legal definition of money does not cover cryptocurrencies, though.
Last year, however, following the amendment of the Liechtenstein Law on Professional Due Diligence to Combat Money Laundering, Organised Crime and Terrorist Financing (Gesetz über berufliche Sorgfaltspflichten zur Bekämpfung von Geldwäscherei, organisierter Kriminalität und Terrorismus-finanzierung, Due Diligence Act – Sorgfaltspflichtgesetz, “SPG”, LGBl. 2017/161), Liechtenstein lawmakers attempted for the first time to formulate a legal definition of virtual currencies. Pursuant to Art. 2 Para. 1 lit. l SPG, virtual currencies (e.g. Bitcoin) are deemed to be digital monetary units that can be exchanged for legal tender, used to obtain goods or services or to store assets, meaning that they can assume the function of legal tender. As a consequence, this excludes those virtual currencies that can be redeemed or used to obtain goods or services only to a limited extent (e.g. bonus programmes). Against this backdrop, it is also clear that legal tender and cryptocurrencies are not to be treated equally, even though they serve the same purposes.
By contrast, the Liechtenstein Financial Market Authority (hereinafter called “FMA”), views cryptocurrencies essentially as “commodities”, whereby other classifications may also be used, depending on the configuration of the token representing the cryptocurrency.
At the current time, there are no cryptocurrencies that are supported or backed by the Government or a bank in Liechtenstein.