Lithuania is the latest country joining the Fintech revolution by recognizing the importance of fostering a regulatory environment that is conducive to change and challenges established norms. The Bank of Lithuania is out with a statement regarding the launch of a sponsored Fintech Sandbox.
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, Chairman of the Board of the Bank of Lithuania stated;
“In creating an innovations-friendly space we aim to provide the best possible conditions for the development of financial technologies and creating the most favorable environment for Fintech companies in the entire Nordic-Baltic region.”
Of course, Lithuania has long been recognized as an entrepreneurial friendly nation. Adding Fintech to the list of initiatives simply makes sense.
The Bank of Lithuania has set an “ambitious goal” of dominating Fintech innovation in the region. The Bank is seeking feedback from the sector in a public consultation.
Companies operating in a Sandbox – testing regime will be able to offer consumers innovative financial products and test business solutions, while the Bank of Lithuania will provide them with consultations.
The Bank expects accepted companies to be subject to simplified regulations and licensing procedures. Some supervisory requirements would temporarily not be applied. If the services work well in the test environment, companies would be able to start operating in normal conditions.
The Bank is accepting both traditional and newcomers to the financial sector in the Sandbox.
The Bank explained;
“As Lithuania implements its aim to become a Fintech centre in the Nordic-Baltic region, the Bank of Lithuania, jointly with other institutions in the country, is creating an environment conducive to the establishment of financial companies and design of new products in Lithuania.”
The following measures are will apply:
- Relatively easy and low-cost authorization process: following submission of all necessary documents, it takes only 3 months for the Bank of Lithuania to take a decision on the issuance of an electronic money or payment institution license. In other EU countries, the process may take 12 months and more.
- Access to the Bank of Lithuania payment infrastructure for non-banking sector companies planning to provide payment services, thus avoiding a middleman.
- Newcomer program. The Bank of Lithuania applies a one-stop shop principle for meetings and consultations with potential financial market participants. Prior to launching a business or a new product, investors may check whether their plans are in line with legislative requirements. Information on licensing opportunities in Lithuania is presented on the Bank of Lithuania website under the section How to obtain a license.
- Specialized banking license. In order to establish a bank in Lithuania that would provide usual banking services, the lowest initial capital requirement in the entire euro area – EUR 1 million – is applied. This is five times less than the requirement applied to banks that provide the full range of services, including investment ones.
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The Bank of Lithuania has outlined a Fintech conducive regime as a strategic objective for 2017 – 2020. The country now joins a growing legion of nations that have embraced innovations in financial services by seeking to create an environment where services can operate under the watchful, yet encouraging, eye of regulators.