Estonia’s Ministry of Finance rules out ban on crypto assets

Estonia’s Ministry of Finance rules out ban on crypto assets

Baltic state Estonia has no plans to ban cryptocurrencies for its 1.33 million residents (January 2021 estimates), the country’s Ministry of Finance said on January 2.

The Estonian government recently approved its Virtual Asset Service Providers (VASP) Better Regulation Bill on December 23, which calls for stringent anti-money laundering policies on crypto firms. Ministry of Finance said:

“The revised draft law builds further on the general prohibition to open anonymous virtual accounts, a rule that came to force in summer 2020 after the booming of license applications and favorable legal environment brought the virtual assets under the scrutiny of FIU and law enforcement authorities.”

Specifically, the government aims to prohibit the opening of anonymous virtual accounts, requires VASPs to identify their customers, and includes FATF recommendations for their platforms. An increase in AML measures would enforce due diligence, audits, and higher levels of capital for crypto firms.

With the Sunday press release, the government subsided rumors, which stated that the new draft legislation would effectively ban decentralized finance (DeFi) and non-custodial wallets. It said:

“…the legislation does not contain any measures to ban customers from owning and trading virtual assets and does not in any way require customers to share their private keys to wallets. The regulation does not affect individuals who own virtual currency through a private wallet not provided by a VASP.”

To further clarify, the Estonian Finance Ministry also introduced an FAQ page that answers common questions about the proposed bill. The bill is yet to be passed by the parliament.

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