The transitional and final provisions of the Law on Digital Assets, stipulate that entities that provide services related to digital assets are obliged to harmonize their business and general acts with the law and bylaws of the National Bank of Serbia and Securities Commission within six months from the day when the law entered into force (by June 29, 2021) and to apply for appropriate cryptocurrency licenses in Serbia.
The general idea of the legislator to leave the existing service providers 6 months to harmonize their business with the Law on Digital Assets was quite reasonable, having in mind all the novelties that this law brings. As it usually happens, two significant problems arose in practice with this plan.
First of all, there were justified concerns regarding the deadlines for the adoption of these acts, because experience has shown that often, and especially when more complex acts are in question, these deadlines are not met. Such actions create legal uncertainty, and interested persons do not have the opportunity to start preparing the documentation for submitting the request because they do not have a complete overview of what the authorities request from them. Specifically, the National Bank of Serbia has adopted several bylaws in mid-May 2021, that regulate digital assets in more detail, while the bylaws of the Securities Commission were adopted in 2020 and 2021. That way, the providers of services related to cryptocurrencies were left with about a month and a half to fulfill the conditions prescribed by the bylaws of the National Bank of Serbia. On the other hand, providers of services who offer services related to digital tokens and other types of digital assets qualifying as financial instruments were left with less than a month to fulfill the conditions that the Securities Commission prescribed.
The second problem refers to the existing service providers. Specifically, service providers were left with a deadline until June 29, 2021, (when the law started to apply) to harmonize their business with the law and apply for a license for the provision of services related to digital assets.
Since the Law on Digital Assets started to apply (as of June 29, 2021), all entities that offer services related to digital assets have to possess appropriate licenses, so as not to violate the provisions of the law and risk getting sanctioned. On the other hand, the competent authorities – the National Bank of Serbia and the Securities Commission had not been able to issue the necessary licenses to existing service providers before the law starts to apply, as they had not have a valid legal basis for this. There were justified concerns that, if an adequate solution is had not been found by the beginning of the implementation of the law, this legal vacuum could have posed quite a problem for the existing service providers who would in fact be forced to halt their business until they obtain the appropriate licenses.
In general, the adoption of the Law on Digital Assets is a good thing, since a new social phenomenon has finally been regulated. The downside is that there are still open issues, as was expected, having in mind that new legal institutions are being introduced and new asset classes are being regulated. We can only hope that the competent authorities will have the capacity and readiness to examine the requests, as well as to decide on them in a timely manner. It seems that the “success” of this law will be decided by the efficiency of the competent authorities in conducting and resolving the proceedings in question.