Estonia used to be a crypto pioneer but is now clamping down on crypto licenses. This is why
Small but tech-mighty Estonia was one of Europe’s leading destinations for cryptocurrency companies.
But the Baltic nation is now getting tough on how it regulates its digital assets and will bring in new rules this month, which some say could deter Estonia’s thriving start-up scene.
The country’s new rules come into force as Europe cranks up crypto regulation and as policymakers become warier of cryptos in the wake of the collapse of the stablecoin TerraUSD and its sister token Luna.
“Cryptocurrency currencies as an asset class is clearly a very, very volatile asset. So I think in the first place, people who invest in it need really to understand what kind of risks they are taking,” Andres Sutt, Estonia’s Minister of Entrepreneurship and Information Technology, said in an interview with Euronews Next.
“And I'm afraid not everybody understands it”.
Estonia’s new regulations mark a sharp U-turn for a country that has a population of just 1.3 million yet last year was home to more than half the world’s registered virtual-asset service providers (VASPs) last year.
The new rules, which begin on June 15, mean Estonian crypto companies will need to meet new transparency requirements; they can no longer have anonymous accounts and they must have a capital of at least €350,000, which marks a tenfold increase.
While some criticise the new regulations as too heavy-handed, Estonia’s government says they are necessary.
“I don't think we have become too tough, but what we are focussing on is on the quality, not quantity [of crypto companies] and the quality means, first and foremost, those companies who actually want to innovate the field, or want to, to do a legitimate business,” said Sutt.
While Estonia’s Ministry of Finance admits the new
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