In a turnaround from previous policy, the Serbian government will now allow the issuance and trading of digital assets and related services under a law that went into effect on December 29.
Serbia reverses the trend on digital assets
The bill was announced in October, and local media reported that the bill was passed by the nation's lawmakers in late November. The "Digital Assets Law" officially entered into force on Tuesday after its publication in the official gazette and will be enforced in six months.
According to the new specifications, digital asset service providers in Serbia can operate after "obtaining permission from the supervisory authority". The country's Securities Commission and the National Bank of Serbia (SNB) are tasked with overseeing and enforcing the law.
Serbia has not always been sympathetic to cryptocurrencies. In 2014, the SNB declared that bitcoin was not legal tender in the country. The new law comes at a time when Eastern European countries, including Romania and Bulgaria, are expanding their technology industries. Serbia is experiencing a technology boom, with industry accounting for over 6% of the country's GDP.
The new rules for the crypto sector
Under the new rules, digital assets can be issued in Serbia with or without an approved white paper, although an asset with an unapproved white paper cannot be advertised in the country and there are limitations on the amount of such assets that can be distributed.
When it comes to trading, crypto exchanges will need licenses to function, under the new law. Secondary trading of digital assets issued in Serbia (with an approved white paper), over-the-counter (OTC) trading on platforms such as Bitcoin Pro and the use of smart contracts in secondary trading.
The provisions of the new law do not apply to digital transactions that are carried out within a limited network of people who accept digital assets "as a form of loyalty or reward, without the possibility of transfer or sale".
The law also does not apply to miners, who are allowed to acquire digital assets through mining. However, financial institutions under the supervision of the SNB are still prohibited from interacting with digital assets except for the safekeeping of cryptographic keys.
Banks may not convert their assets into virtual currencies or “instruments associated with digital assets”, provide services relating to digital assets or have interests in companies offering such services. Digital asset service providers are required to seek authorization from a supervisory body within six months prior to implementation of the law.
