In Montenegro, there is currently no legal regulation that defines the field of cryptocurrency trade, and it is expected that the first version of the draft law in the field of digital assets will be completed by the end of this year, the Ministry of Finance informed.
The President of the Commission for the Capital Market (KTK), Željko Drinčić, told the Podgorica newspaper that Montenegro “is in the vast majority of countries” where cryptocurrencies are not yet regulated, and that there is a real danger of various abuses, which is why it is very important to work on educating people and informing the public through the media with as many facts and arguments as possible.
– Since there is currently no legal regulation concerning the trade in cryptocurrencies and in general the business of digital assets, we consider this type of possible transactions currently carried out in Montenegro to be illegal – said the Ministry.
They stated that a working group was formed within the Council for Financial Stability in November last year, with the aim of analyzing existing legal models in other countries and drafting a national legal act concerning the field of digital property.
The working group, in addition to the representatives of the Ministry of Finance, consists of representatives of the Central Bank (CBCG), KTK and the Insurance Supervision Agency (ANO), while representatives of the FIU have the status of associate members
– This working group, systematically, with the advisory support of World Bank (WB) experts, looks at the comparative practice in the field of digital property regulation around the world – China, Turkey, Singapore, South Africa, Serbia and works on creating national solutions that will be harmonized with the new EU regulation on the regulation of the crypto-property market, adopted by the European Parliament on May 20th of this year. Montenegro, as a candidate country for EU membership, will be the first non-EU country to harmonize the regulation of digital assets with EU acquis – explained the Ministry.
From that government department, they added that the working group is actively summarizing already adopted national legal solutions in other countries, from the point of view of the impact on financial stability, consumer protection, provision of efficient and safe payment transactions, risks associated with tax treatment and prevention of money laundering and financing of terrorism. as well as the aspirations of Montenegro to become the first next member of the EU.
– The expectation of the working group is that the first version of the draft law will be completed by the end of this year, and it will be forwarded to the SB and the International Monetary Fund (IMF) for comments and suggestions before being sent to the public discussion – the representatives of the Ministry announced.
They stated that the working group concluded that the most expedient model for rounding up the regulation of digital property is provided by the creation of three legal solutions.
The Ministry added that the regulatory framework for cryptoassets will be incorporated into the draft law on digital assets and will be based on the transposition of EU regulations in this area – MICA (The Markets in Cryptoassets), which represents the most comprehensive regulatory framework for cryptoassets in the world.
– According to the assessment of the working group, in the area of prevention of money laundering and financing of terrorism, it is necessary to comply with FATF recommendations 15 and 16, which refer to work with virtual assets and service providers connected to virtual assets, while the tax treatment of digital assets will be rounded off through a set of tax laws – the Ministry explained.
The Ministry emphasized that the question of the date and application of future legal solutions in this area is still under consideration, bearing in mind that the implementation of MICA in the EU will begin in July next year, and only for the part related to “stablecoins”, while the rest of the MICA regulation will be applied only from January 2025.
From that department, they add that the preliminary position of the working group and the Ministry is that Montenegro, as a candidate country for membership, should not apply EU regulations before they are implemented in the countries of the Union, and that issue, as they state, will certainly be the subject of further joint discussions. analysis with representatives of the EU, the IMF and the world bank.
– We are convinced that Montenegro, as a country striving for accelerated membership in the EU, should also position itself in this area as a credible and transparent destination, where legal security will be provided to the crypto industry and investors, but at the same time provide an adequate level of user protection. The Ministry of Finance and regulators in Montenegro are of the opinion that we should not succumb to quick and incomplete national solutions, which can lead to an unnecessary escalation of risks and which, in the end, can cost us dearly when it comes to the international reputation of Montenegro – they said from the Ministry .
Drinčić also reminded that there is currently no regulation in Montenegro that governs this area and added that a certain number of countries have tried to regulate this area in some way and apply certain principles or rules.
According to him, for now, the most comprehensive regulatory framework for cryptoassets in the world has been adopted in the EU.
– MiCA is a regulation-regulation that regulates cryptoasset markets throughout the territory of the EU. It was adopted by the European Parliament on April 20th this year, so it should enter into force in the second half of next year – said Drinčić.
He believes that the adoption of the announced legal solutions will regulate the supervision and regulation of activities related to digital assets.
– Definitely they will, with the fact that every legal solution also entails the adoption of a whole series of by-laws, various rules and regulations, which not only refer to the capital market but also to the tax treatment of that type of property, then regulations from the aspect of preventing money laundering. So far, there have been two written legal solutions in Montenegro, but they have not received the green light from international partners and as far as I know, they have not even started the legal procedure for consideration – said Drinčić.
He stated that a few months ago, the CBCG, in contacts with the IMF and the World Bank, discussed this issue, and at that time both institutions expressed their interest in helping Montenegro implement part of the legislation that primarily concerns the prevention of money laundering and terrorist financing.
– After the exchange of opinions at the level of institutions in Montenegro and the World Bank and the IMF, the proposal is that the basis for the drafting of the law on digital assets should be the recently adopted regulation at the EU level, MiCA. MICA has defined different types of jurisdiction depending on whether it deals with trading or payments in cryptocurrencies. Precisely for this reason, a working group composed of representatives of the CBCG, KTK, ANO and the Ministry of Finance was appointed and the idea is to work on the transposition of MICA in accordance with domestic legislation, but also to cover the areas of money laundering prevention and financing with special legal solutions. terrorism, as well as tax treatment – announced Drinčić.
He pointed out that it is clear that Montenegro is not the only one, but on the contrary, it is in the vast majority of countries where cryptocurrencies are not yet regulated, so he sees no reason why we as a country would be more attractive compared to some other countries that also do not have regulations in this area.
– There is a real danger of various abuses and that is why it is very important to work on educating people and informing the public through the media with as many facts and arguments as possible – emphasized Drinčić.
He expects that the CBCG, KTK, ANO, in cooperation with the state, will have a harmonized text of the law in this area as soon as possible in accordance with all EU recommendations and that the parliament will adopt that legal solution.
– It is the shortest and best way to protect all citizens of Montenegro from various fraudsters, but also from all those who want to engage in this business illegally. With that, we will enable all those who want to trade in cryptocurrencies or invest in them to do so in the manner prescribed by law – said Drinčić.
Answering the question of whether state authorities are currently exercising any control over the cryptocurrency market in Montenegro, Drinčić stated that it is a matter for each institution separately.
– As far as KTK is concerned, we currently have no information that any legal entity that is licensed to carry out activities from the part of the regulation that we control is engaged in these activities – said Drinčić and added that in any case all citizens who are engaged in trade in this type of property must be careful and aware of the increased risk when investing in this property.
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