LITHUANIA Law and Practice Contributed by: Donatas Šliora and Marius Matiukas, ADON legal
might be required to aid consumers in compar - ing different service providers. Sector-specific regulations can introduce further restrictions or disclosure requirements. Fintechs involved in lending, investment services or insur - ance need to pay close attention to rules govern - ing those sectors. Additionally, merchants may face limitations on surcharging (adding fees for certain payment methods), especially concern - ing card-based transactions regulated under the EU’s Regulation on interchange fees for card- based payment transactions (IFR). 2.4 Variations Between the Regulation of Fintech and Legacy Players Lithuania embraces “technology-neutral” ap - proach in its financial regulatory framework. This means that fintech companies offering services that align with existing financial regulations are generally subject to the same rules as traditional legacy players. Nonetheless, in practice, fintechs may ini - tially qualify for lighter licenses (eg, for a pay - ment institution or electronic money institution) based on their focused service offerings. These licences have less stringent requirements than full-fledged banking licences, easing the regu - latory burden while enabling fintechs to launch their services. 2.5 Regulatory Sandbox Lithuania offers a regulatory sandbox supervised by the Bank of Lithuania. This sandbox acts as a real-world testing environment where new and existing fintech companies can present innova - tive financial products and services to consum - ers. The Bank of Lithuania provides guidance and closely monitors these tests to assess risk and viability. Fintech companies demonstrating successful innovation within the sandbox may
then transition to operating under normal con - ditions within the Lithuanian market, subject to obtaining any required licences. The regulatory sandbox is open to fintech com - panies offering innovative products or services, especially those challenging existing regula - tory frameworks or requiring refinement before wider launch. Additionally, the LBChain platform allows businesses exploring blockchain-based services to gain knowledge, conduct research and potentially test new products under the regulator’s guidance. The Bank of Lithuania has an application pro - cess for the regulatory sandbox, with specific evaluation criteria. The degree of supervision within the sandbox depends on the innovation’s nature and potential risks. Ultimately, even suc - cessful sandbox participation does not guaran - tee automatic licensing; companies must still adhere to standard regulatory requirements for Lithuania’s financial regulatory landscape fea - tures the Bank of Lithuania as a main regulator supervising all licensed financial service provid - ers. It holds broad authority for licensing and overseeing various financial institutions, includ - ing credit institutions, payment institutions, elec - tronic money institutions, insurance companies, investment firms and CASPs. Additionally, the board of the Bank of Lithuania establishes regu - lations that dictate the operations and conduct of these financial market participants. their chosen business activities. 2.6 Jurisdiction of Regulators In addition to the Bank of Lithuania, there are a number of area-specific regulators and supervi - sors.
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