LIECHTENSTEIN Trends and Developments Contributed by: Christian Inmann and Markus Stelzl, Inmann Stelzl & Partner Attorneys at Law Partnership
Overview Liechtenstein has built a strong reputation as a juris - diction that combines a clear legal framework with openness to financial and digital innovation. The flexi - ble corporate law, political stability and the openmind - ed and innovation-driven government of Liechtenstein provide for a favourable environment for financial ser - vices offered cross-border, and for new, innovative fin - tech business models. Liechtenstein’s participation in the European Eco - nomic Area (EEA) means companies can operate throughout the EEA under harmonised frameworks, while the Financial Market Authority Liechtenstein (FMA) emphasises engagement with pioneering busi - ness models such as tokenisation and digital financial services. This first-mover approach of Liechtenstein is also reflected by its legislation. With the Token and TT Service Provider Act (TVTG), Liechtenstein intro - duced one of the first pieces of European legislation for blockchain-based businesses (both from a regu - latory perspective and through the establishment of clear rules under civil law) in 2020. This has led to increased interest from start-ups and existing national and international players in the blockchain sector and brought many market participants to Liechtenstein. From a Liechtenstein perspective, the fintech sector has entered a phase of consolidation and strategic maturity. What began as experimentation with digital assets, DLT-based business models and automation, has evolved into a more integrated financial ecosys - tem in which technology is no longer peripheral, but central to value creation, efficiency and client experi - ence. Banks and other legacy players Liechtenstein has been known for its strong banking sector for several decades. For many years, the coun - try has hosted a large number of banks relative to its small size, making financial services an important part of its economy. Over the decades, these banks and other legacy players, such as asset management firms or insurance companies, have played a key role in wealth management and international finance, attract - ing clients from around the world.
As a result thereof and due to the introduction of the TVTG, several Liechtenstein financial institutions and banks began integrating blockchain solutions into their offerings. These range from token custody to broader digital asset infrastructure partnerships. More recently, the entry into force of the Markets in Crypto-Assets Regulation (MiCAR) began to change the market landscape. This new and harmonised legal framework has encouraged banks and other financial institutions in Liechtenstein to align their blockchain- based services with both the domestic TVTG frame - work and the broader EU regulatory environment. These institutions were able to take advantage of existing governance, compliance and technical infra - structure, making it easier to adopt to MiCAR stand - ards and broaden their portfolio. In addition to existing Liechtenstein banks, new spe - cialised banks and financial institutions entered the market. These new players add to the existing strong legacy players in the fintech and blockchain sector in Liechtenstein. Besides banks, the first MiCAR authorisation in Liech - tenstein was granted to a Liechtenstein asset man - ager, which reflects the interest of legacy players in these new fintech operations. Tokenisation and token issuance – still trending Liechtenstein continues to be a leading jurisdiction for tokenisation projects and token issuances, attracting ongoing innovation in both utility and security token markets. Building on its comprehensive TVTG, the country provides a stable and clear legal framework for mapping real-world assets to blockchain systems. This includes the tokenisation of a broad number of assets, from art and commodities to securities or equity rights, with the legal enforceability of token- based ownership well defined under civil law. Many market participants or new token projects have come to Liechtenstein, taking advantage of the com - bination of the TVTG framework together with MiCAR and issued crypto-assets based on a MiCAR white paper.
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