Liechtenstein’s law on financial services providers using tokens and trustworthy technologies: a microstate as a trailblazer in blockchain legislation

I. Introduction

In recent years, the Principality of Liechtenstein has endeavoured to create an attractive environment for local digital financial services institutions using the so-called “blockchain technology”. In 2016, the Liechtenstein government established a task force to explore topics such as blockchain-type trustworthy technologies to analyse the possibilities inherent in such technologies for the banking sector and to elaborate appropriate provisions of law governing these issues.

In the past few years, Liechtenstein’s increasing openness to other countries and the lively propagation of investments in blockchain-based digital financial services by service providers using such trustworthy technologies could be observed. On 3 October 2019, the “Landtag” (Parliament of the Principality of Liechtenstein) passed a law on Tokens and Trustworthy Technology Services Providers (abbreviated TTT Act)¹. This Act, which came into force on 1 January 2020², aims to fundamentally regulate this relatively new and complex topic, and is probably the most progressive law concerning such matters compared with the laws of other European jurisdictions³.

This article will initially discuss the blockchain phenomenon and cryptocurrencies followed by the process of mining such cryptocurrencies and the associated problem of dramatically surging electricity consumption. On the one hand, the world is facing the increasingly drastic effects of climate change. For this reason, the Paris Agreement (based on the United Nations Framework Convention on Climate Change of 1992)⁴, was signed during the United Nations Climate Conference on 12 December 2015 in Le Bourget. Its aim is to foster climate resilience and low greenhouse gas emissions as well as sustainable development⁵. On the other hand, we have the limitless and unrestricted development of the cryptocurrency industry, which leads to the production of undesirable greenhouse gases at an ever-increasing rate. According to the opinion of cryptocurrency businesses, the worldwide use of digital cryptocurrency represents a reasonable alternative to the monetary structure of central banks. However, this appears to be a rather bold claim, given that cryptocurrencies have no intrinsic value and lead to significant environmental damage caused by mining cryptocurrencies and conducting financial transactions by means of such cryptocurrencies.

Apart from these negative environmental impacts, blockchain technology can basically be evaluated as a positive phenomenon that creates new opportunities for the application of this and similar secure technologies in financial markets. For this reason alone, it is necessary to create appropriate legal regulations in order to regulate this area and to eliminate or at least limit, as far as possible, the legal uncertainty that often still exists in this area of law.

At the end of 2020, EU institutions were initiating the creation of framework legislation for this new area of law by drafting the so-called “Markets in Crypto Assets Regulation” (MiCA Regulation)⁶. Work on this law is currently underway and it will be interesting to see in the future whether and, if so, in what way the TTT Act, which originates from a legal system outside the EU, inspires this European legal framework law. The need to amend the TTT Act accordingly as a result of the adoption of these EU framework regulations cannot be excluded, since Liechtenstein, along with the Nordic countries Iceland and Norway, is a member of the European Economic Area and is, therefore, obliged to align its national law with EU law in many areas.

II. Meaning of the terms blockchain and cryptocurrency

Cryptocurrencies and the so-called “distributed ledger technology” (DLT) (technology of decentralised accounting), which are also known as blockchain technology, have so far hardly been covered by the law. Since cryptocurrencies are not issued and controlled by central banks⁷, there are currently no satisfactory legal regulations concerning this question, either at national or at international level. Transactions recorded in the blockchain are immutable and any attempt to tamper with one block would cause the entire blockchain following that block to be manipulated. In the event of an attempted fraud, i.e. the modification of a transaction that has already taken place or the introduction of an unauthorised transaction, the blockchain nodes would, during the verification process, reveal the incompatibility of the copy with the entries in the network and thus would deny the entry of the corresponding incompatible transaction into the blockchain⁸.

As already mentioned above, unlike in the case of traditional fiat currencies, thanks to the decentralised circulation model, the issuance of new bitcoins (BTC) is not directly controlled by an individual or by an institution. Instead, an independent control mechanism linked to the issuance of new bitcoins is permanently embedded in the software of the bitcoin nodes (peer-to-peer), which was defined when the software was created and made public. Finally, the blockchain and the entire BTC protocol is itself independent of the knowledge held by the “Bitcoin Foundation”⁹, a US organisation aimed at promoting and strengthening the security of the bitcoin system, which associates programmers to develop and spread the use of cryptocurrencies. The construction of the bitcoin allows it to be owned anonymously and transferred to another person¹⁰.

Bitcoin is currently the world’s most popular cryptocurrency and is based on a corresponding network consensus (consensus mechanism), which allows the use of the new payment system using a fully digital means of payment. It represents the first peer-to-peer (P2P, i.e. person-to-person) type of decentralised payment network, operated by its users without any supervision from central authorities or the participation of middlemen (intermediaries). From the users’ perspective, bitcoin is a kind of cash of the internet. The cryptocurrency bitcoin can also be understood as the largest existing triple-entry bookkeeping-type accounting system, containing a kind of cryptographic security of the system. Bitcoin is the first digital coin that represents the “embodiment” of the idea of the cryptocurrency phenomenon.

The blockchain technology used in the case of bitcoin is also used by other existing cryptocurrencies. Some of these cryptocurrencies are trying to exploit the potential of the blockchain to a much greater extent than bitcoin – in particular, the “Ethereum platform”¹¹, which uses the potential of so-called “smart contracts” and decentralised applications (commonly known by the abbreviation “DApps”). Smart contracts are legal relationships that are created, monitored and executed in an automated manner with the creation of appropriate protocols. DApps, whose operations are based on smart contracts and controlled by network participants in peer-to-peer mode, are not monitored by a separate entity. The cryptocurrency that fuels this platform is called “ether”.

Due to their extraterritoriality, blockchain and cryptocurrencies represent an immense challenge from the point of view of creating corresponding legal regulations for jurisprudence, since a legal system must first be chosen to which the legal relationships resulting from the new matter are subject. Furthermore, this legal system must be designed accordingly, since the logic of the legal systems that currently exist often cannot be applied with correspondingly effective consequences in the blockchain reality. In this reality, there is an effective exchange of assets that is largely autonomous from the current legal systems.

III. Cryptocurrency used as an official means of payment?

El Salvador was the first country in the world to accept the cryptocurrency bitcoin as an official means of payment. Since 7 September 2021, this Central American country of around six and a half million people has allowed the cryptocurrency bitcoin to be used as legal tender on its territory, alongside the US dollar¹². The original monetary unit of this state is the Salvadoran “colón” (SVC)¹³. Firstly, the Money Integration Act came into force on 1 January 2001, allowing the free movement of the US dollar as a means of payment at a fixed exchange rate in the country. Because of this, El Salvador is dependent on the US Federal Reserve. The colón was not officially phased out, but the Salvadorans prefer to use the US dollar as a currency, precisely because of its stability¹⁴.

In June 2021, the law introducing a new, additional official means of payment, namely the world’s most popular cryptocurrency bitcoin, was passed in El Salvador. Article 2 of the Salvadorian Bitcoin Law states that the exchange rate between the bitcoin and the US dollar is freely established by the market from the moment the law comes into force. As is well known, the bitcoin is not controlled by any central bank, since it is generated by means of a decentralised and extremely energy-consuming computer process. For this reason, many critics consider that the introduction of the bitcoin currency as an official means of payment cannot represent an adequate step in the right direction for this country. Bitcoin is, without doubt, the subject of speculation and ultimately subject to violent price fluctuations. If the bitcoin price rises, many Salvadorans will not convert this cryptocurrency into US dollars. However, if the exchange rate falls violently, as it did recently, many residents could suddenly lose their liquidity if, for example, they have to service loans taken out in US dollars at the same time.

The International Monetary Fund (IMF) maintains that bitcoin is not the appropriate official means of payment for the state of El Salvador, since the general use of this cryptocurrency is just too risky¹⁵. The use of bitcoin as official tender has obvious problems, the most important of which is money laundering, followed by the exceptionally high price volatility of this cryptocurrency relative to fiat currencies.

Venezuela was the second country in the world to introduce a new means of digital payment on 1 October 2021. The country operates the denomination of the fiat currency called “bolívar soberano” (VES) while promoting the new digital currency called “bolívar digital” (VED) for use in domestic payments. The bolívar digital is used simultaneously alongside traditional banknotes, with fiat currency and digital currency being closely linked, based on a fixed conversion rate: one bolívar digital equals 1 million VES¹⁶.

In the case of Venezuela, therefore, this circumstance cannot lead to risks such as those feared in the case of El Salvador. The incentive to use the new digital currency of Venezuela is more of a protective measure or a pilot project, comparable to the “Dunbar project” regarding intergovernmental payment enforcement using central bank digital currencies. This pilot project was initiated in autumn 2021 by the Bank for International Settlements (BIS) in Basel, Switzerland, which invited the central banks of Malaysia, Singapore, South Africa and Australia to conduct tests on intergovernmental settlements using central bank digital currency (CBDC). This project is about working with different partners to develop prototypes for DLT platforms. The progress of this project and its preliminary outcome were announced at the “Singapore FinTech Festival”¹⁷ held in November 2021.

The European Central Bank (ECB), based in Frankfurt-upon-Main, had also completed its public social survey at this time, during which European consumers were asked whether they would accept a digital euro issued by the ECB and controlled by this institution in the future. ECB President Christine Lagarde summarised the course to be taken by the institution with regard to the idea of CBDC in the case of the euro in the following words: “The euro belongs to Europeans and our mission is to be its guardian”¹⁸. Lagarde believes that Europeans are increasingly using digital forms of spending, saving and investing. The role of the ECB is to protect trust in money, so it must ensure that the euro also stands the test in the digital age. “Looking ahead, we need to be ready to introduce a digital euro, shall the need arise”¹⁹. Each of the central banks participating in the euro zone views the potential benefits of adopting digital money differently. However, it can be expected that the ECB will issue a digital euro within the next five years.

On the other hand, as far as the European Economic Area (EEA) and the European Free Trade Association (EFTA) are concerned, the National Bank of Iceland (“Seðlabanki ĺslands”) takes a more neutral stance on issuing a digital Icelandic crown²⁰, while the National Bank of the Kingdom of Norway (“Norges Bank”) supports the further development of issuing a digital Norwegian crown²¹. The Swiss National Bank (SNB) does not yet see the need to issue a digital Swiss franc as another legally permissible means of payment for Switzerland. This means that the Principality of Liechtenstein, which is in monetary union with its Swiss neighbour, cannot be expected to introduce and use a digital Swiss franc in the near future.

Of some interest in this context should be that in December 2020, the SNB took part in the pilot project “Helvetia” (settling tokenised assets in central bank money) together with the “Bank for International Settlements”²² and is currently involved, with the BIS and the French National Bank (“Banque de France”), in the pilot project “Jura”, which is based on testing two central bank currencies (bank digital currencies) and a French digital financial instrument. The pilot transactions are taking place on a platform powered by DLT blockchain technology. The experiment itself involves exchanging a financial instrument denominated in euro for CBDC using the so-called delivery-versus-payment (DVP) principle, and exchanging digital euros for digital Swiss francs using the same principle²³.

IV. Blockchain and bitcoin in the European Union

The first Digital Day 2018, organised by the European Commission, took place in Brussels on 10 April 2018. On this day, 21 EU member states²⁴ and the Kingdom of Norway, the only one of the three EEA member states, signed a declaration on the creation of a European Blockchain Partnership and cooperation in the establishment of a so-called “European Blockchain Services Infrastructure”. This infrastructure is intended to support the rendering of cross-border digital public services with the highest security standards while preserving the private sphere. In the second half of 2018, another five EU member states joined this declaration, namely Denmark, Italy, Greece, Romania and Cyprus.

On 1 February 2019, the Principality of Liechtenstein joined this declaration as a further EEA member state, and later the two remaining EU member states Croatia and Hungary. The United Kingdom and thus also Gibraltar, being a British Overseas Territory on the European continent that had previously been active in the field of cryptocurrencies, are no longer involved in this project due to Brexit. Iceland and Switzerland do not yet actively participate in the “European Blockchain Partnership”.

Since the publication in March 2018 of the financial technologies action plan (FinTech Action Plan) adopted by the European Commission, this EU executive has been examining the challenges and possible courses of action arising from the use of digitalised assets (so-called “crypto assets”). In light of the increased growth in cryptocurrency market capitalisation in 2017, European Commission Vice-President Valdis Dombrovskis wrote to the European Banking Authority (EBA) and the European Securities and Market Authority (ESMA) in December 2017 calling on these two authorities to urgently re-issue an appropriate warning to investors. In the aforesaid action plan for the “FinTech” sector for 2018, the European Commission commissioned the EBA as well as the ESMA to assess the application and adequacy of the legal framework currently in place in the EU for regulating financial services with regard to crypto assets. The report, published in January 2019, made it clear that while some such crypto assets may fall within the scope of European Union rules, the effective application of such rules to the relevant crypto assets is by no means always straightforward. Attention was also drawn to the fact that current European legal regulations can pose an obstacle to the effective application of DLT. At the same time, however, the EBA and the ESMA emphasise that, beside EU regulations on combatting money laundering and terrorism, the majority of crypto assets are ultimately not subject to EU financial services regulations. In their opinion, the regulations regarding consumer and investor protection and the protection of market integrity do not cover crypto assets, even though trading in these assets does entail a corresponding risk in these areas.

On 24 September 2020, the European Commission proposed that the European Parliament and the Council adopt a regulation, the draft of which includes a total of 126 articles (MiCA Regulation). This proposal is based on Article 114 TFEU²⁵, in which the Parliament and Council of the EU are granted the power to adopt measures for harmonising the legal and administrative provisions of member states, the object of which is the establishment and functioning of the internal market. The drafting and adopting of the MiCA Regulation aims to remove obstacles hindering the establishment of an international financial services market and to improve its functioning by ensuring full harmonisation of the relevant legislation in this area. Several EU member states have chosen different legal solutions, which means that the rendering of cross-border financial services in the field of crypto assets is likely to encounter some problems. The dissemination and application of national legislative solutions hinder the creation of equal competitive conditions in the single market in terms of consumer and investor protection, market integrity and competition protection. In those member states which have already introduced systems to regulate trading in crypto assets tailored to their needs, certain types of trading risks are accordingly reduced. However, in the remaining member states, consumers, investors and market participants are inadequately protected from the main threats involved in trading in crypto assets, namely fraud, cyberattacks and market manipulation.

The MiCA Regulation is currently being discussed with legislators from EU member states, the European Parliament and the Council in order to develop a coherent framework regulation that harmonises and complements the existing law in this area. There is no deadline for developing and adopting such framework legislation. However, it can be expected that by 2024 at the latest, work on such complex framework law to regulate this sector within the EU will be complete to eliminate or at least reduce the risks associated with blockchain technology²⁶. In March 2022, the European Parliament’s economic and monetary affairs committee voted against a ban on proof-of-work bitcoin mining, and thus a passage that would have led to a de facto ban on bitcoin in Europe²⁷ was deleted from the final draft of the MiCA Regulation²⁸. On 30 June 2022, the Council of the EU, chaired by the French Presidency, announced that the trialogue negotiations had been summarised in a final draft for the intended MiCA Regulation²⁹. The proposed regulation extends to issuers of unsecured crypto assets and so-called “stablecoins” as well as to the trading venues and wallets in which crypto assets are held.

V. EU legal standards in the EEA regarding blockchain and cryptocurrencies

In many areas, the legal standards of the EU must also be guaranteed in the legislation of the EEA member states outside EU territory (i.e. in Iceland, Norway and Liechtenstein)³⁰. The European legal provisions of the MiFID II Directive³¹ and of the MiFIR Regulation³² apply to the markets for financial instruments in the EEA that use blockchain technology and carry out cryptocurrency activities, so that the regulations contained in these provisions must find their way into the legal systems of these three countries.

The Icelandic Parliament passed Law No. 115/2021 on the financial instruments market³³ only in June 2021, thereby implementing the legal requirements flowing from the MiFID II Directive into its legal system. The mentioned law came into force on 1 September 2021. In Norway, the MiFID II Directive had already been implemented into Norwegian law at an earlier stage. The Norwegian Securities Trading Act³⁴, the new version of which came into force on 1 January 2019, was amended accordingly. Its Section 8-1 on the incorporation of the provisions of the MiFIR Regulation into the Securities Trading Act only came into force after the incorporation of the MiFIR provisions into the EEA Agreement, which took place on 4 March 2019³⁵. From then on, the European legal provisions of the MiFIR Regulation have found their way into the legal acquis of the EEA and apply directly in the member states of the EEA that are not in the EU, i.e. Iceland, Norway and Liechtenstein. Hence, these regulations did not have to be transposed by the three mentioned members into national law by issuing appropriate national provisions. The implementation of the MiFID II Directive into the legal system of the Principality of Liechtenstein made it necessary to fundamentally revise the Banking Act³⁶, the Asset Management Act³⁷, the Banking Ordinance³⁸ and also the Asset Management Ordinance³⁹. It was also necessary to make changes to the Act on Certain Undertakings for Collective Investments in Securities⁴⁰ and also to the Financial Market Authority Act⁴¹. The legislative process at state level was completed and the changes that had been adopted came into force on 3 January 2018.

VI. Bitcoin mining in Switzerland

Switzerland may have been a little slower in regulating cryptocurrencies in the past and is taking a different approach by not enacting a fundamental legal act to regulate this matter. However, Switzerland has one of the strongest attributes for cryptography in the world: it is well known as a thriving financial centre with a long tradition, has a much larger territory than Liechtenstein and also has the appropriate infrastructure for mining cryptocurrency.

About five years ago, a cryptocurrency mine called “AlpEreum” (a brand of the company “Bitcoin Suisse AG”) appeared near one of the numerous hydroelectric power plants in central Switzerland. However, this plant could not compete with the huge mines in China, Iceland and the USA and thus was eventually shut down.

A little later, another such mine was set up in Switzerland, in the small community of Gondo-Zwischbergen in the canton of Valais, on the border with Italy. Gold has been found and mined in Gondo-Zwischbergen for centuries and it was a popular border crossing for smugglers. Following a devastating landslide, the young people of the village decided to leave their hometown to find work elsewhere.

A company called “Alpine Tech AG” was supposed to revitalise the village thanks to a mine working on the basis of the latest technologically advanced knowledge, this time to mine cryptocurrencies. Unfortunately, this endeavour also turned out to be unprofitable. Alpine Tech AG is still active in Switzerland, but is now conducting research in the field of cryptocurrencies and artificial intelligence. After all, Switzerland is a country that is open to the new blockchain technology and cryptocurrencies.

Meanwhile, the cryptocurrency mine “Swiss Alps Mining & Energy AG”, belonging to the capital group of Alpine Tech AG, is continuing its mining activities in the Swiss Alps. There are thousands of unused and derelict alpine huts of historical value. Swiss spatial planning law prohibits these buildings from being used for residential purposes. That is why the company Swiss Alps Mining & Energy AG renovated these huts and located computers (in special containers) there for mining cryptocurrency. In this way, the huts, as historically valuable and picturesque monuments, were saved from imminent decay and put to viable use. Renewable electricity at reasonable prices is supplied by the nearby Swiss hydroelectric power plants and the low temperatures prevailing on the mountain tops always keep the computer equipment cool⁴².

Anyone who harbours doubts about the stability of the idyllic alpine huts on the mountain peaks can choose the so-called federal bunker in the village of Amsteg in the canton of Uri, which was erected during the Second World War to serve as a part of the Swiss National Redoubt (“réduit national”) in the Alpine massif due to concerns that Switzerland’s neutrality might be possibly violated. This bunker has an area of 3000 m² and is currently owned by the company “Swiss Gold Safe AG”, which offers services in the form of safe storage of precious metals, works of art, jewellery and other valuables, including safe storage of digital data.

In addition to the appropriate infrastructure, both on the mountain peaks or in the Alpine massif, the financial centre of Switzerland also has a proven set of legal instruments to protect the industry using blockchain technology. The centre of this industry is located in the canton of Zug, and the valley with the picturesque lake, where the capital bearing the same name is located, is commonly known as “Swiss Crypto Valley”. Therefore, the canton of Zug was the first in Switzerland to start accepting tax payments in cryptocurrency to promote and further develop blockchain and cryptocurrency technologies.

In 2020, the Swiss authorities announced that from February 2021, citizens and companies based in the canton of Zug would be able to pay up to CHF 100,000.00 of their taxes in bitcoin (BTC, +1.42%) or ether (ETH, –2.57%), whereas no partial payments in cryptocurrencies are permitted and therefore cannot be accepted⁴³.

The number of blockchain companies in Switzerland and Liechtenstein rose to 919 in the first half of 2020, which is 77 more than at the end of 2019. Of these, 439 are located in the canton of Zug, 161 in Zurich, 84 in Liechtenstein, 49 in Geneva and 44 in Ticino⁴⁴. For the first half of 2022, 1128 such companies are currently registered in Switzerland and Liechtenstein⁴⁵. This clearly shows that the Alps are a coveted location for conducting cryptocurrency businesses.

However, it should be noted that the SNB has a rather conservative stance on digital currencies and still does not want publicly available digital money in the central bank. SNB director Andréa Maechler sees a much better alternative for the SNB in allowing instant payments within the existing payment system. Likewise, she does not rate cryptocurrencies such as bitcoin or ether as real money, since in her opinion they do not have the properties that are essential for money and the high fluctuations in value of cryptocurrencies would speak against their monetary property: “We treat cryptocurrencies more as a speculative investment vehicle rather than as real money.”⁴⁶

The Swiss Financial Supervisory Authority (“FINMA”) in Bern said it will “take a balanced view of the interests of the virtual currency industry and allow legitimate innovators to navigate the regulatory landscape”. As of June 2021, the Zurich-based “SIX Swiss Exchange” had offered a record number of 100 products traded on stock exchanges as so-called “Exchange Traded Products” (ETPs) and structured cryptocurrency products with a total traded value of CHF 4.6 billion. This circumstance makes it clear that Switzerland is a country prepared to promote trade in cryptocurrencies on its territory.

VII. Liechtenstein between its neighbours Switzerland and the European Union

In addition to its close ties within the EEA to the two Nordic EEA member states Iceland and Norway, Liechtenstein has the closest ties with its western neighbour, i.e. Switzerland, which is not a member of the EEA. This is due to geographical, economic, political, cultural and social links with Switzerland. As already mentioned, Liechtenstein has been party to the Swiss monetary union since 1923, and from 1924 it unilaterally adopted the Swiss currency as legal tender for its territory⁴⁷.

After Austria’s accession to the German Reich in 1938, Switzerland extended loans and made corresponding economic commitments to its neighbour to support the principality’s sovereignty during this difficult period. In return, Switzerland expected Liechtenstein to strictly comply with international treaties binding on both countries. In 1939, Switzerland demanded that Liechtenstein cede it the Ellhorn mountain massif in the south of Liechtenstein, on the river Rhine and directly opposite the Swiss fortress of Sargans, because of its importance for Swiss national defence.

It was not until 23 December 1948 that Switzerland and Liechtenstein signed a treaty on the general revision of the state border in the section between the Rhine and the Würzerhorn mountain, according to which Ellhorn was given to Switzerland and replaced by an agricultural area of the same size with a value of around CHF 120,000.00 located in the same border section. From that point on, the relationship between the two neighbours grew stronger. A certain dualism only emerged when Switzerland rejected the EEA in a referendum in December 1992.

Unlike Switzerland, Liechtenstein opened up towards the EU by joining the EEA, thus being obliged to continuously adapt its national law to the requirements of EU law. The Swiss Confederation has no such obligation, since it is the only EFTA member state not belonging to the EEA, so there is no direct harmonisation of Swiss national law with EU law. Indirectly, however, EU law has quite a significant impact on the national law of the Swiss Confederation⁴⁸.

Switzerland is currently linked to the EU by more than 120 sectoral bilateral agreements, which contain provisions similar to the legislation adopted by EEA countries on the free movement of persons, goods, services and capital. However, no bilateral agreement on the freedom to provide financial services has been concluded. In the absence of such an agreement with the EU, as a non-EEA member state Switzerland cannot benefit from direct market access to the EU or the EEA or from an equivalent EU passport.

Instead of a full membership, Switzerland is aiming for an association with the EU, which itself proposed that even in the event of an association, Switzerland should postulate the full implementation of the laws of the EU with regard to the negotiated bilateral agreements and their ongoing adaption to the “acquis communautaire”⁴⁹. A particularly sensitive issue was the creation of a mechanism that would define the conditions for implementing the newly created EU law, establishing an institution to independently monitor compliance with it and develop suitable procedures for settling disputes. Switzerland saw the establishment and activity of such an institution as an opportunity to convince the European Commission to conclude a so-called “framework agreement” based on the concept of Bern and to achieve a better management of the agreement from a Swiss perspective. However, the EU was not willing to implement such framework agreement, since it maintains that only an agreement analogous to the EEA agreements may be considered⁵⁰.

Liechtenstein is closer to the EU than Switzerland, as it needs the European single market due to its small domestic market. On the other hand, Liechtenstein also needs Switzerland as an additional market, especially in the area of financial and stock exchange transactions. As is well known, there is no stock exchange in Liechtenstein. This means that Liechtenstein companies and market participants (whether as supervised intermediaries or as supervised products) seek admission to European Union stock exchanges or to a stock exchange in third countries, such as neighbouring Switzerland, to conduct their business there. Switzerland’s geographical proximity and good reputation as a stable financial centre make this third country particularly attractive for Liechtenstein.

VIII. Liechtenstein’s legal provisions on trustworthy technologies

The Principality of Liechtenstein had recognised the need to develop and draft appropriate legal provisions to regulate trustworthy technologies in order to create legal certainty in its own jurisdiction and to attract new investments to it. As already mentioned, Gibraltar and the smallest member state of the EU, Malta, had made similar efforts in their jurisdictions.

However, Liechtenstein’s regulations differ from those in Gibraltar and Malta, since its legal system differs from these two systems. Both Gibraltar’s and Malta’s legal systems are characterised by a strong reference to the Anglo-Saxon legal system (common law), in which case law is the crucial element. Liechtenstein, however, like Switzerland, Austria and Germany, belongs to the Roman-Germanic legal family (civil law) and usually operates with written codes of law which include legal definitions.

A. History of the legislation initiative in Liechtenstein

Between 2015 and 2016, enquiries were repeatedly sent to the Liechtenstein Financial Authority (“FMA”) regarding possible uses of blockchain technology in this country. For this reason, the Liechtenstein Ministry of Presidential Affairs and Finance (“Liechtensteinisches Ministerium für Präsidiales und Finanzen”) finally took a closer interest in this topic and consequently considered whether it should not be subject to national legislation.

The first step in developing corresponding legal regulations to be applied in the Principality of Liechtenstein jurisdiction came in 2016, when a working group dealing with new technologies was established. This working group paved the way for the creation and development of the idea of a token, understood as a carrier (manifestation) of ownership of various things and rights, whereby the token itself does not create a new right, but embodies it, being solely a “vehicle” (container) in order to represent the given right⁵¹. It should be emphasised that a large number of renowned players in the field of blockchain and new technologies have made their way to the Principality of Liechtenstein to establish and successfully operate their activities in this country. One example is the creation in 2016 of the “æternity“ platform⁵² by Yanislav Malahov⁵³. This is the first project based on blockchain technology with market capitalisation of over USD 1 billion. The Liechtenstein-based æternity platform focuses on the use of smart contracts, which allows transactions to be conducted entirely based on trustworthy technologies without the involvement of external intermediaries. The fact that communication with the FMA is smooth and efficient is also quite important for the choice of Liechtenstein as a business location, especially because in June 2018, a separate department for FinTech, the so-called “Financial Innovation Group”, was set up within the FMA’s structure. As already mentioned, the Liechtenstein government, including the head of government and even the sovereign, is open to FinTech projects. Hence the “Crypto Country Association e.V.”⁵⁴ was established in Liechtenstein, dealing with various topics concerning Liechtenstein’s cryptographic ecosystem in order to disseminate knowledge about innovative blockchain-type techniques.

In March 2018, it was publicly announced for the first time that the Liechtenstein government was intending to create appropriate legislation to regulate this new matter in order to encourage businesses to invest in this sector of new trustworthy blockchain-type techniques. In August 2018, the Liechtenstein government published the draft of the intended new TTT Act on the use of trustworthy technologies. In the same month, the joint stock company “NEON Exchange AG”, which is currently trading as “Nash AG”, was entered in the Liechtenstein commercial register and issued its tokens with the name “NEX”, being the first security token offering (STO) approved by the FMA⁵⁵. The co-founder of this company, Fabio Canesin, confirmed that the location of this innovative venture, namely Liechtenstein, was a competitive advantage, since this country allowed the use of blockchain technology and was surprisingly open to new trustworthy blockchain-type technologies, promoting their further development. Moreover, he said, Liechtenstein had the appropriate legal infrastructure as well as the necessary know-how in this area⁵⁶. The deadline for public consultations with various organisations⁵⁷ regarding this legislative project expired at the end of November 2018. During its first reading, the original name of the law was changed from “Gesetz über auf vertrauenswürdigen Technologien beruhende Transaktionssysteme” [“Act on Transaction Systems Based on Trustworthy Technologies”] to the new name “Token- und VT-Dienstleister-Gesetz (TVTG)” [“Token and TT Service Provider Act”], as this new title describes the legal scope of the law more accurately. Liechtenstein Members of Parliament admitted that the matter was not easy for any layperson to understand at first, but they still took the view that the potential for the new blockchain technologies was so great and promising for the country’s further economic development that its positive sides should be rated higher than the possible risks. The TTT Act regulates various transactions in which decentralised technologies, appropriate to current needs, are used in areas including financial services, logistics, mobility, energy and media. In a way, the TTT Act represents a framework law that covers all such solutions based on trustworthy technologies and regulates them accordingly.

It should be reiterated that the Liechtenstein government announced its intention to pass a corresponding law in spring 2018 and the law itself was passed in autumn 2019. This swift action vividly illustrates the flexibility and determination of the Liechtenstein legislature⁵⁸. The TTT Act is the first set of rules worldwide that contains a legal definition of the term “token”⁵⁹.

There have been two changes to the law to date: one on 30 September 2020 determining the reliability criteria for service providers who use trustworthy technologies (TT services providers)⁶⁰, and another on 3 December 2020 further clarifying the legal definition of agents who use trustworthy technologies (TT agents)⁶¹. According to the latter change, which came into effect on 1 April 2021, entrepreneurs who provide services based on the use of trustworthy technologies in Liechtenstein on a commercial basis for and on account of a foreign service provider are obliged to register with the FMA within six months of the law amendment coming into force.

B. Structure and contents of the new Blockchain Act (TTT Act) and its legal definitions

The TTT Act is divided into four chapters with a total of 51 articles. These include the chapters “General Provisions”, “Civil Basis (civil law principles)”, “Supervision of TT Service Providers” and “Transitional and Final Provisions”. This article concentrates solely on the civil law structure of the new legislation dealt with in the chapter “Civil Basis (civil law principles)”, leaving the regulatory part (“Supervision of TT Service Providers”) undiscussed.

This Act deliberately does not form part of the Liechtenstein laws on financial markets. Therefore, TT service providers are specifically not classified as financial intermediaries. This clear separation was made in order to focus on the provisions of the TTT Act in relation to two subjects, “tokens and trustworthy technologies”. The benefit of this was the creation of a fundamental set of rules for this new legal area. Due to the rapid development of blockchain technologies and the equally rapid development of their possible applications, the Liechtenstein legislator believes that it is absolutely essential for the definitions contained in the new law to be as broad as possible so that they can remain up to date, especially with regard to the coming generations of such technologies. For this reason, the law provides a broad, technology-neutral approach to regulate the entire token business using the term “transaction systems based on trustworthy technologies” (TT systems) and hence is not limited to the blockchain model or initial coin offerings (ICOs).

Article 1 par. 1 TTT Act describes the subject matter of the law:

“This law establishes the legal framework for all transaction systems based on Trustworthy Technology and in particular governs: a) the basis in terms of civil law with regard to Tokens and the representation of rights through Tokens and their transfer; b) the supervision and rights and obligations of TT Service Providers.”

Article 1 par. 2 TTT Act states, that the law pursues the following objectives:

“a) to ensure trust in digital legal communication, in particular in the financial and economic sector and the protection of users in TT Systems; b) to create excellent, innovation-friendly and technology-neutral framework conditions for rendering services concerning TT Systems.”

The TTT Act contains 20 legal definitions which are briefly presented below.

1. Basic definitions (Article 2 par. 1 a) – i) TTT Act)

The legal definitions contained in the Act are fundamentally important to the systematic understanding of the new legal issues it deals with. These include the following nine definitions:

• • •  
• “Trustworthy Technology (TT)”: Technologies through which the integrity of Tokens, the clear allocation of Tokens to TT identifiers and the disposal of Tokens is ensured;
• “TT Systems”: Transaction systems which allow for the secure transfer and storage of Tokens and the rendering of services via Trustworthy Technology;
• “Token”: a piece of information on a TT System in the form of a digital container⁶² which can represent claims or rights of membership towards a person, rights to property or other absolute or relative rights and is allocated to one or more TT Identifiers⁶³;
• “TT Identifier”: an Identifier that allows for the clear allocation of Tokens;
• “TT Keys”: keys that allow for the disposal of Tokens;
• “Users”: persons who dispose of Tokens and/or use the TT Services;
• “Token Issuance”: the public offering of Tokens;
• “Basic Information”: Information about Tokens to be offered to the public, enabling the user to make a judgement about the rights and risks associated with the Tokens as well as the TT service providers involved;
• “TT Service Provider”: a person who exercises one or more functions under Article 2 par. 1 k) – u) TTT Act.

2. Definition of several kinds of TT service providers (Article 2 par. 1 k) – u) TTT Act)

The basic legal definition of the term “TT Service Provider” (Article 2 par. 1 i) TTT Act) is followed by a catalogue of eleven different types of such TT service providers:

• “Token Issuer”: a person who publicly offers the Tokens in their own name or in the name of a client;
• “Token Generator”: a person who generates one or more Tokens;
• TT Key Depositary” (TT Key Holder): a person who safeguards TT Keys for clients;
• “TT Token Depositary” (TT Token Holder): a person who safeguards Tokens in the name and for the account of others;
• “TT Protector”: a person who holds Tokens on TT Systems in their own name and on behalf of others;
• “Physical Validator”: a person who ensures the enforcement of rights in accordance with the agreement, in terms of property law, represented in Tokens in TT systems;
• “TT Exchange Service Provider”: a person who exchanges legal tender against Tokens and vice versa and Tokens for Tokens;
• “TT Verifying Authority”: a person who verifies the legal capacity and the requirements for the disposal of a Token;
• “TT Price Service Provider”: a person who provides TT system users with aggregated price information on the basis of purchase and sale offers or completed transactions;
• “TT Identity Service Provider”: a person who identifies the person in possession of the right of disposal related to a Token and records it in a directory;
• “TT Agent”: a person who distributes or provides TT Services in Liechtenstein on a professional basis in the name of and for the account of a foreign TT Service Provider.

3. Definition of Token (Article 2 par. 1 c) TTT Act [Token Container Model])

One of the main topics of the new law is the legal classification of the token and its legal definition. Since the possible uses of tokens are far more diverse than in the case of classic financial instruments currently existing on the financial market, it was essential to develop a clear definition of the term “token” for the new law in order to create legal certainty.

Liechtenstein has opted for this solution not only in order to get to grips with the issues arising in connection with cryptocurrencies and ICOs, but also to create a corresponding legal foundation that provides a more comprehensive coverage and regulation of this matter and is not limited to just one generation of this dynamically developing technology. In this way, the Liechtenstein legislator wanted to avoid having to draft a new legal regulation for every new possibility of using tokens. The legislator’s intention was thus to create a uniform regime for the entirety of transaction systems based on trustworthy technologies. A token, as defined in the TTT Act, is a digital embodiment of all types of rights provided for in the system of trustworthy technologies. In other words, the token is a kind of digital vessel (container) that contains or materialises a specific right.

Article 2 par. 1 c) TTT Act reads as follows:

“For the purpose of this law a Token is: a piece of information on a TT system which:
1. can represent claims or rights of membership against a person, rights to property or other absolute or relative rights; and
2. is allocated to one or more TT Identifiers.”

Accordingly, this definition includes all existing tokens (e.g. utility tokens, security tokens, payment tokens) and tokenised objects (including, for example, works of art), tokenised real estate, tokenised securities (so-called “uncertificated securities”, in German “Wertrechte”) as well as further forms to be expected. The legal definition clearly states that the token does not constitute a thing within the meaning of property law. The layman may initially have the impression that a token⁶⁴ comes close to a thing understood as a physical object or is even equal to such a thing. However, the concept of ownership of a physical object (thing), as described in Liechtenstein property law⁶⁵ dating from 1923, is expressly and in principle limited to physical objects. The catalogue of things and rights in rem (rights to things) is a closed catalogue in Liechtenstein property law, although this law is closely based on Swiss property law. Tokens are not qualified as things – this is because they neither represent physical objects nor come close to such objects in terms of their type of appearance⁶⁶. The term “token” rather should be understood in a functional sense⁶⁷.

The essence of such a token can be well demonstrated using bitcoin as an example. In the bitcoin system, there are also no separate bitcoin files that could be sent or attributed to a specific person, but there is only a uniform chain of blocks, namely the so-called “blockchain”. Put simply, the bitcoin unit only represents the entry in the register (ledger) that can be assigned to a specific person. The respective bitcoin does not possess an own number and only the individual transaction carried out on the blockchain can be identified without any doubt. Moreover, it is not possible to materialise the token. Since a token embodies only the rights to things (understood as a term for all types of rights in rem), it is clear that the creation of a token does not entail the creation of a new right, but only that the existing respective right conforms to the rules of the blockchain technology. One dare say that the Liechtenstein legislature took the right decision by consistently not making any changes to the country’s provisions of property law, which are based on Swiss property law⁶⁸. Accordingly, the Liechtenstein legislature consciously did not introduce the token to the catalogue of rights in rem (titles to property) on the understanding that a token is not a physical thing. Bearing in mind that, in technical terms, a token only represents information, i.e. is an entry in transaction systems based on trustworthy technologies, in other words such a token consists only of digital character sequences, it becomes obvious that the token has no physicality at all, but is just a digital creation. According to the experts heard during public consultations on the new law, the application of the term “thing” to a token in the laws of Liechtenstein would neither be appropriate nor pertinent. Theoretically, one cannot exclude the possibility of an extension of the definition (concept) of a right in rem that goes beyond corporeality and could thus include non-corporeal things⁶⁹. Hence, one day the legislator could decide that the term “thing” also includes the token⁷⁰.

It should be emphasised, however, that such a step would require profound changes in property law. A large number of legal provisions would have to be redrafted, taking into account the newly created thing called “token” accordingly. The legal consequences of such adjustments would have to be carefully thought through, as property law not only regulates ownership of things but also of real estate and also concerns restricted rights in rem (such as easement, mortgage, etc.). The Liechtenstein legislator has, therefore, decided to autonomously regulate these rights embodied in the token as well as the legal consequences associated with them exclusively for transaction systems based on trustworthy technologies within the framework of the aforementioned TTT Act. For this purpose, corresponding legal definitions were introduced into the new law. Therefore, from the legal definition of the term “token”, it follows with unambiguous certainty that it is not a thing in the sense of property law.

C. Token as “Wertrecht” (uncertificated security)

The TTT Act also refers to the new legal construction introduced into the Liechtenstein legal system called “Wertrecht” (uncertificated security)⁷¹. This new construction, which was introduced as § 81a of the Final Part of the Liechtenstein Persons and Companies Act⁷², where securities are regulated, allows securities to be digitally fixed (virtually embodied) according to the rules of blockchain technology by means of a token. Such virtual embodiment of a security was invented by law to enable security transactions based on blockchain technology. These uncertificated securities are dematerialised securities, i.e. securities not issued in the form of a paper certificate. Such paper certificates have been replaced by the entry of the Wertrecht in an electronic register called “Wertrechtebuch” in German (book of uncertificated securities)⁷³. However, where such a book of uncertificated securities is kept by means of trustworthy technologies as defined in the TTT Act, any legal disposition of such securities can only take place pursuant to the provisions of the TTT Act⁷⁴. For this reason, tokens as defined in the TTT Act can embody dematerialised securities.

Depending on the way in which such dematerialised securities are embodied, different legal regulations and principles apply to them: if we are dealing with a traditional dematerialised security, the provisions of the Liechtenstein Persons and Companies Act apply to it. Hence, such securities are treated according to the principle of consensus (also known as the principle of causality)⁷⁵. If, however, such securities are embodied in the form of a token, only the provisions of the TTT Act will apply⁷⁶.

It should be noted that in 2020, Switzerland also considered tokenising securities in order to trade securities embodied in tokens on a blockchain with the same legal status as traditional assets. Finally, in September 2020, the Swiss parliament passed a law at federal level that includes an expanded regulatory framework for national crypto and blockchain technologies⁷⁷. Central changes were made to achieve the desired goal – among others, in the Code of Obligations⁷⁸, in the Debt Collection and Bankruptcy Act⁷⁹ and in the Financial Market Infrastructure Act⁸⁰. These legislative amendments, which also include the newly created ledger-based securities (“Registerwertrechte”)⁸¹, entered into force on 1 February 2021. Hence, Switzerland now has a new set of legal instruments fulfilling the current requirements in connection with the continuous development of crypto and blockchain technologies⁸². Unlike the Principality of Liechtenstein, Switzerland has only made absolutely vital changes to existing laws, without creating a new codification of law that regulates blockchain technology as a new area of law outside financial market law.

D. Civil basis (civil law principles)

The chapter “Civil Basis” (in German “zivilrechtliche Grundlagen”) of the TTT Act deals with all aspects and possibilities concerning the creation and issuance (mining) and the cancellation (declaration of invalidity) of tokens, as well as of owning such tokens including the authorisation to dispose of them and thereby effect the transfer of such tokens to other persons. In other words, this chapter encompasses the entire cycle from the creation of a token to its elimination and can thus be understood as providing the legal principles for the transfer of tokens between parties.

Of particular importance was defining the rights to the token to ensure the effective transfer of these rights to other persons, together with the effects of these rights represented by the token. The TTT Act applies if tokens are generated or issued by a TT service provider having its registered office or residence in the Principality of Liechtenstein, or if the parties to a legal transaction concerning tokens expressly declare that the provisions of the TTT Act are to apply. If the token was generated or issued in Liechtenstein, or if the parties expressly chose the TTT Act to apply to their legal relationship⁸³, the token is considered to be an asset in Liechtenstein (see Article 3 and Article 4 TTT Act). Liechtenstein jurisdiction in matters of property law results from § 50 of the Court Jurisdiction Act⁸⁴, which regulates the venue of matters of property law. According to § 32 of this Act, substantive jurisdiction is conferred on the Princely Court of Justice in Vaduz (in German “Fürstliches Landgericht in Vaduz”).

It should be pointed out that due to the strong wish of the Liechtenstein legislator to open up Liechtenstein’s jurisdiction in cross-border matters, qualification of the token as a thing in the property law sense was waived, bearing in mind that a choice of law in property law is excluded both by the laws of Liechtenstein and in foreign European legal systems.

The following provisions regulate the power and the entitlement to dispose of the token: according to Article 5 TTT Act, the TT Key Depositary (TT Key Holder) has the power to dispose of the token. It is further assumed that the person possessing the power of disposal over the token also has the right to dispose of it. For every previous holder of the power of disposal, it is presumed that he/she was the person who had the right of disposal at the time of his/her ownership.

According to Article 6 par. 1 TTT Act, disposal of the token is:

“a) the transfer of the right of disposal of the token; or

b) the establishment of securities or a right of usufruct to a token.”

According to Article 6 par. 2 TTT Act, disposal of a token requires that:

“a) the transfer of the token is concluded in line with the regulations of the TT System where a restricted right in rem to a token can also be established without transfer of the token itself, if this is apparent to third parties and clearly determines the time of establishing;

b) the transferring party and the receiving party unanimously declare the intention to transfer the right of disposal of the token, or that they want to establish a restricted right in rem to a token; and

c) the transferring party is the person possessing the right of disposal pursuant to Article 5 [TTT Act], including the possibility of acquisition in good faith according to Article 9 [TTT Act].”

Article 8 par. 1 TTT Act states that the person who possesses the right of disposal reported by the TT system is deemed to be the lawful holder of the right represented in the token in respect to the obligor. “By effecting payment to the person who has the right of disposal as reported by the TT system, the obligor is withdrawn from his/her obligation against the above-mentioned person, unless the obligor knew, or should have known with due care, that this person is not the lawful owner of the right” (Article 8 par. 2 TTT Act).

The last article of this chapter dealing with civil law principles, namely Article 10 TTT Act, regulates the procedure for cancelling tokens. If a TT Key is unaccounted for, or a token is otherwise not functional, the person who possessed the right of disposal at the time of the loss, or at the moment the token became non-functional, is entitled to apply for the token to be cancelled in non-contentious court proceedings before the Princely Court of Justice in Vaduz. For this purpose, the applicant must credibly demonstrate his/her right of disposal and the loss of the TT Key, or the non-functionality of the token. The respondent is the person obliged due to the right represented in the token. The court decision regarding the invalidation of a token must be published immediately in the official gazette of the Principality of Liechtenstein and in another suitable manner at the discretion of the court. The applicant may also assert his/her right without token upon cancellation or demand the generation of a new token at his/her own expense.

E. Applying the principle of abstraction

It should be emphasised that Liechtenstein property law is strongly influenced by German Pandectistics (historical school of law), teaching Roman law as a model of conceptual jurisprudence (as codified in the Digest, also known as the Pandects, in Latin digesta seu pandectae), whose most famous advocate was the German jurist Friedrich Carl von Savigny. However, unlike in the German legal system, the disposal of rights in rem in Liechtenstein, Austria and Switzerland depends on the existence of a legal reason (causa). This is the so-called causality principle (also called “consensus principle”), which prevails in Liechtenstein property law. It has only been codified for real estate, but according to doctrine and case law also applies to movable property. As a rule, a right is disposed of in order to fulfil a corresponding contractual obligation (resulting, for example, from a purchase agreement). The disposal of a right essentially occurs in order to fulfil the contractual obligation (in German “Verpflichtungsgeschäft”) and is subject to the general conditions of legal effectiveness (legality of the respective legal act, no violation of good faith principles, etc.). Such disposal of a right can be challenged on the basis of a so-called “defective declaration of intent” (as, for example, in case of fraudulent misrepresentation, innocent misinterpretation, etc.).

The relationship between contractual obligation and material transfer (in German “Verfügungsgeschäft”) can be regulated either so that the legal disposal simply does not produce any legal consequences without the effective existence of a contractual obligation (principle of causality as can be found in the legal systems of Switzerland and Austria) or so that the disposal of a right is effective itself if the contractual obligation is defective or non-existent, with the consequences of such a disposal being corrected by applying the provisions on unjust enrichment (principle of abstraction, as found in the German legal system). In contrast to such legal systems which are based on the consensus principle, the German legal system distinctly separates the disposal transaction (contractual obligation) from the final transaction (final transfer). The consensus principle⁸⁵ is based on the thesis that property is ultimately something merely imaginary, which can, therefore, be transferred by simple agreed consensus. The German scholar and jurist Carl Friedrich von Savigny and his followers of the conservative school of law could not agree with this thesis, but ardently supported the principle of abstraction, which was finally accepted and introduced into the German legal system. According to German law, it is imperative that the creation, amendment, transfer and cancellation of rights in rem take place as a result of a separate, independent legal action, i.e. such an action that is based on foreseeable rules for abstract legal actions⁸⁶.

As we understand in the light of the above-mentioned, German law does not make the element of the legal title (causa) a necessary prerequisite for the effectiveness of any legal transaction. On the contrary, it shapes a large number of legal actions (acts) in such a way that their effectiveness does not depend on the validity or defectiveness of the causa on which they are based⁸⁷. This construction appears perfectly suited to regulate legal relationships in the system of trustworthy technologies. The irreversibility of transactions when exercising legal dispositions with the help of systems using trustworthy technologies ultimately persuaded the Liechtenstein legislator to choose a solution based on the aforesaid principle of abstraction and to strictly follow this principle as applied in German law. By including Article 6 par. 3 TTT Act, the Liechtenstein legislator implemented the principle of abstraction originating from German law into the Liechtenstein legal system⁸⁸. This provision states that if a token is disposed of without a legal title (causa) or if an initially existing legal title later ceases to exist, the legal transaction must be rescinded in accordance with the law of unjust enrichment.

IX. Summary

There are no territorial boundaries or obstacles for new technologies and virtual currencies. They are part of our reality and already today have a remarkable impact on the most diverse areas of our daily lives. For this reason, all efforts aimed at elaborating state-of-the-art regulations for all problems associated with this new matter in the respective legal systems and ensuring the best possible protection of all digital operations are to be evaluated as positive overall. For the first time, the new TTT Act creates binding rules in this area for the jurisdiction of the Principality of Liechtenstein. However, due to the supranational character of decentralised networks and the possibilities of almost unhindered cross-border trade with tokens, new legal solutions must be found to establish legal certainty in this field. The practice to be expected in applying the new provisions discussed here and the expected jurisprudence based on the provisions of the new TTT Act will show over time to what extent the Liechtenstein legislators, obvious trailblazers in this field, have elaborated and adopted accurate, effective legal solutions.

It will also be important to look at the further course of the development of EU legislation that is currently being discussed and about to take definite form in the MiCA Regulation. This legislative initiative can be seen as positively radical and proactive, but is apparently also based on the relevant Liechtenstein regulations. The initiative clearly shows that the EU has a firm will to get a grip on the fundamental regulatory difficulties that the decentralised nature of the global network (World Wide Web) brings with it. This should be achieved by establishing legal rules, namely, among others, for DLT. It will be interesting to see to what extent the EU will ultimately base its law on the solutions worked out in Liechtenstein law, which is the first jurisdiction in the world to define the term “token” in its laws. Equally interesting are the possible changes that must be made to the Liechtenstein TTT Act so that it is ultimately in line with the future MiCA Regulation. In any case, the new TTT Act “made in Liechtenstein” is a highly ambitious piece of legislation that demonstrates Liechtenstein’s potential in the area of cryptographic services and the further development of this sector in a secure and well-functioning legal system.