Serbia’s Law on Digital Assets went into effect last week. The Serbian parliament has also adopted a set of amendments to the tax regulations covering digital assets and bylaws, which regulate cryptocurrency business in detail.
Among other things, the adopted bylaws specify payments in foreign currencies in connection with digital asset transactions, identification and verification of the identity of a natural person using means of electronic communication (video-identification), licensing of cryptocurrency business and the approval of the National Bank of Serbia.
The Law defines the basic terms related to digital assets, including digital assets themselves, virtual currency, digital asset-related service provider, user of digital assets, white paper and similar terms.
The scope of the Law is defined as the regulation of issuance of digital assets and secondary trading in digital assets in the Republic of Serbia, provision of services related to digital assets, lien and fiduciary rights to digital assets, the competence of the Securities Commission and the National Bank of Serbia as the bodies responsible for supervision of the provisions of this Law.
The Law regulates crowdfunding, which maybe represents the most important feature of the Law since it can be seen as an innovative way to obtain capital for SMEs. The Law states that, in order to obtain capital, issuers can issue digital tokens that do not have the characteristics of stocks, nor are they exchangeable for stocks, provided that the total value of the tokens issued for one year does not exceed the amount of 3,000,000 euros.
The law defines the user of digital assets as a physical person, entrepreneur or legal entity, which uses or used a service connected with digital assets or addressed the digital asset-related service provider for the usage of this service. This way, users are awarded certain rights and obligations in the situation when they use the services of digital asset-related service providers, which can be compared with the legal regime and protection that consumers enjoy when buying goods and services with special reference to the electronic conclusion of contracts.
The law also defines the owner of digital assets as a user of digital assets, but also as a person who acquired digital assets regardless of the business relationship established with the provider of services related to digital assets or transactions performed through that provider. The Law here refers to mining of crypto currencies as a way of obtaining them without establishing a business relationship with the provider of services. The Law explicitly allows mining but it also explicitly states that the Law is applicable to mining only if it is managed through a digital asset-related service provider.
The Law provides for the constitution of lien on digital assets, as well as fiduciary rights to digital assets.
The supervisory bodies for the application of the Law are the National Bank of Serbia, for the part of the Law related to crypto currencies as a type of digital assets, and the Securities Commission, for the digital assets that have the characteristics of financial instruments.
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