The cryptocurrency industry is finally getting the attention it deserves regulation wise as more nations continue to recognize the emerging asset class. The latest in line is Serbia, where the regulators, in a reversal of previous policy, has now permitted digital assets issuance and related services under a law that came into effect from December 29.
The draft was first introduced back in October, and local reports revealed that the law was passed in late November by the nation’s legislators. Dubbed the “Digital Asset Law”, the new regulation went into effect on December 29 after being published in the official gazette and will be applied six months from now.
Per the new policies, digital asset service providers in the nation will be able to legally operate after “obtaining permission from the supervisory authority.” The nation’s Securities Commission and the National Bank of Serbia (NBS) will be supervising and applying the law.
The new law will allow digital assets to be issued in Serbia with or without an approved whitepaper. However, unapproved whitepapers won’t be allowed to advertise, and there are also some limitations to how much of these assets can be distributed.
For trading, exchanges will be required to obtain a license. Secondary trading of digital assets issued in Serbia (with an approved white paper), over-the-counter (OTC) trading, and use of smart contracts in secondary trading are also permitted.
But these provisions do not apply to digital transactions that are executed within a limited network of people accepting digital assets “as a form of loyalty or reward, without possibilities of its transfer or sale.” Furthermore, the law also doesn’t apply to miners who are allowed to obtain digital assets via the process of mining, per the new law.
Regulated institutions Prohibited
However, financial institutions that are operating under the supervision of the NBS are barred from transacting with digital assets except for when keeping cryptographic keys. These institutions are prohibited from converting their assets to virtual currencies or “instruments associated with digital assets,” provide services related to cryptocurrencies or participate in businesses offering such services.
As of now, Digital asset service providers have been urged to request permission from a supervisory body within the six months prior to the implementation of the law.
Serbia hasn’t always been crypto-friendly, as back in 2014, the nation’s central bank had declared that Bitcoin won’t be accepted as a legal tender within the nation.