LITHUANIA Law and Practice Contributed by: Tadas Kuzminskas, APB “Leagus”
es, it makes no difference whether a company or a self‑employed individual is paid in virtual currency, cash or by bank transfer – such payments must still be recorded in the accounts. If payment for sold goods and/or services is made in crypto-assets, for corporate income tax purposes the entity is regarded as having acquired an asset (crypto-asset) for the amount recognised as the entity’s income from those goods and services. If an entity pays for purchased assets or services in crypto- assets, the purchase price of these assets or services is the amount corresponding to the selling price of the crypto-assets. From the point of view of personal income tax, when goods sold or services provided are paid for in cryp- to-assets, the amount corresponding to the market price of the goods sold or services provided would be considered income from individual activities. When a resident (including those carrying out individual activi- ties) pays for goods and services in crypto-assets, it is considered that they sell crypto-assets, the selling price of which is the market price of the goods or services. 6.2 Stablecoins 6.2.1 Fiat Currency and Algorithmic Stablecoins Under the MiCAR framework (directly applicable in Lithuania), fiat currency and “algorithmic” stablecoins are treated very differently. Fiat currency is issued by a state or central bank (euros, US dollars, etc). MiCAR regulates two types of stablecoins: ARTs and EMTs (see 2.2 Crypto-Asset Regulatory Frame- works ). An ART is a type of crypto-asset that is not an elec- tronic money token and that purports to maintain a stable value by referencing another value or right or a combination thereof, including one or more official currencies. An EMT is a type of crypto-asset that pur- ports to maintain a stable value by referencing the value of one official currency.
“Algorithmic” stablecoins that aim to maintain a stable value in relation to an official currency, or to one or several assets, via protocols that increase or decrease the token supply in response to demand may, depend- ing on their design, fall under the ART or EMT regime. However, where “algorithmic” stablecoins do not maintain stability through backing by assets, they will generally not meet the definitions of ART or EMT and will instead qualify as “other” crypto‑assets under MiCAR, even if they aim to maintain a stable value. 6.2.2 Stablecoin Regulation Under the MiCAR framework (directly applicable in Lithuania) fiat‑backed stablecoins are regulated as electronic money tokens (EMTs) if they: • are a crypto‑asset; • purport to maintain a stable value by reference to one official currency; and • represent a claim on the issuer. Under MiCAR, stablecoins are regulated through a bespoke framework that is closely aligned with the existing EU payments/e‑money regime, but with additional, crypto‑specific requirements. MiCAR dis- tinguishes two main categories of stablecoins: ARTs and EMTs (for a definition see 6.2.1 Fiat Currency and Algorithmic Stablecoins ). EMT issuers must be credit institutions or e‑money institutions, so they sit inside the existing licensing perimeter but with additional MiCAR obligations: • a white paper and ongoing disclosure obligations; • additional requirements for “significant” EMTs (stricter capital, liquidity, supervision); and • specific rules on reserve management, custody and investment of backing assets. ART issuers are authorised under MiCAR as ART issu- ers (not as e‑money institutions unless they also issue EMTs). Requirements include: • authorisation under MiCAR; • reserve and stabilisation mechanisms, clear redemption rules; • own funds, governance, risk and liquidity require- ments;
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