Estonia might stop playing nice with its burgeoning cryptocurrency sector. According to Reuters, the major crypto hub will put companies that work with digital assets under intense scrutiny to mitigate money laundering risks.
A double-edged sword
Madis Muller, who is deputy governor of the Bank of Estonia, claims that its crypto-friendly approach made the country a top destination for many Blockchain-oriented businesses. Clearly, Estonia wanted to get these companies on board to revive its economy. Now, Muller admits that it’s ‘too easy’ for crypto businesses to operate in the country, which leads to reputational risks that are related to money laundering. Madis Reimand, who spearheads Estonia’s FIU, channels Muller’s criticism, seeing cryptocurrencies as a serious threat.
Hardly anyone will pass a vetting process
Estonian lawmakers are currently mulling over a major clampdown on local crypto-oriented businesses. The police will be given authority to vet such companies according to a list of parameters. For example, having a business presence in Estonia is one of the basic requirements, and the report states that many local operators will fail from the get-go. Muller goes as far as predicting that the lion’s share of the companies will be forced to kiss goodbye to their licenses.
Notably, Kaspar Korjus, who manages the country’s e-residency program, proposed to establish a national cryptocurrency called ‘estcoin’, but that plan has been scrapped.