Lithuania has rolled out the welcome mat for cryptocurrency ventures, resulting in a financial boom. However, EU central banks continue to fret over the disruptive influence of virtual currencies.
Ever since Bitcoin first burst onto the scene, the cryptocurrency space was as open and free as the Wild West. But just like the American frontier, the space is slowly being hemmed in by regulations and legislation. Yet some places, such as Lithuania, are bucking this trend, and the result is an economic boom.
While a lot of countries are clamping down on cryptocurrency, the Baltic nation of Lithuania is taking a different tack. The country is fully embracing blockchain and crypto-based businesses by not putting up any real legislative or regulatory roadblocks.
The result of the country’s open embrace of all things crypto has paid off handsomely. The national economy is projected to grow by 3.1 percent, which is almost a full percent higher than the European average of 2.3 percent.
Lithuania has raised 500 million euros from cryptocurrency and blockchain-related businesses over the last year. Startups from all over the world have taken note of the country’s stance and have started to move there to do business, with the capital city of Vilnius being a popular destination.
Central Banks Not Happy
As usual, many of the EU’s central banks are fretting about the unfettered environment Lithuania has created. They have spouted the usual FUD about cryptocurrency being used for illegal activities, terrorism, and other such horrors.
Quite a few of the central EU banks have thrown shade at virtual currencies over the course of the year. Mark Carney of the Bank of England remarked on Bitcoin, saying:
It has pretty much failed thus far on … the traditional aspects of money. It is not a store of value because it is all over the map. Nobody uses it as a medium of exchange.
The National Bank of Poland paid YouTube star Marcin Dubiel to create a video showcasing the dangers of investing in cryptocurrencies. The video’s title translates into “I Lost All My Money.” Swedish Central Bank deputy governor Cecilia Skingsley said that Bitcoin isn’t even a currency.
Not to be outdone, the governor of the central bank of Spain, Luis Maria Linde, said:
In my opinion, their current use (of cryptocurrencies) presents more risks than benefits: they have low acceptance as a means of payment, suffer extreme volatility, present multiple operational vulnerabilities and have been related to fraudulent or illicit activities in many cases.
Such negativity isn’t deterring Lithuania at all. Lithuanian MEP Antennas Guoga said that the country is attracting hard-working innovators. He’s also pretty honest in the motivation behind the country’s open embrace of cryptocurrency, stating:
Economically, we are still far behind Western Europe, but we don’t have much to lose.
What do you think about Lithuania’s approach to attracting blockchain and cryptocurrency businesses? Let us know in the comments below.
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