The bill was announced in October and local media reported that the law was passed by the country’s legislature in late November. The “Digital Assets Act” officially came into force on Tuesday after its publication in the Official Gazette and will be applied in six months.
According to the new specifications, digital asset service providers can operate in Serbia after “obtaining approval from the supervisory authority”. The country’s Securities Commission and the National Bank of Serbia (NBS) have the task of overseeing and enforcing the law.
Serbia has not always been friendly to crypto. In 2014, the NBS stated 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 tech industries. Serbia is experiencing a technology boom that accounts for more than 6% of the country’s GDP.
With 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 the number of these assets that can be distributed is limited.
When it comes to trading, the digital asset exchanges require licenses to operate under the new law. Secondary trading in digital assets issued in Serbia (with an approved white paper), over-the-counter (OTC) trading, and the use of smart contracts in secondary trading are also allowed.
The provisions of the new law do not apply to digital transactions carried out within a limited network of people who accept digital assets “as a form of loyalty or reward without the possibility of their transfer or sale”. The law also does not apply to miners who are legally allowed to acquire digital assets through mining.
However, financial institutions under the supervision of NSB are still prohibited from dealing with digital assets unless they retain cryptographic keys. They cannot convert their assets into virtual currency or “digital asset-related instruments”, provide digital asset services, or participate in companies that provide such services.
Digital asset service providers must obtain regulatory approval within six months of the law being implemented.