Estonia bank to study benefits of integrating Bitcoin technology

Estonia bank to study benefits of integrating Bitcoin technology

(CoinDesk) Estonia-based bank LHV has announced a new project that will explore
the legal framework and potential uses of bitcoin’s block chain
technology in banking so it might develop bank services for bitcoin and
other digital currencies.
“We are interested in the technological
side of digital currencies as we hope it could make bank services more
simple and efficient,” Priit Rum, head of communications at LHV, told
CoinDesk.
The project manager will examine all digital currencies, not limiting itself to bitcoin.
For
now, the bank won’t engage in trading bitcoin, Rum said, but more
likely, could develop its payments system using block chain technology.
The company claims to be the first bank in the world to implement such a program, stating:

“We
have been aware of crypto currencies for some time now […] we decided
last month that establishing a side project to explore the block chain
technology and analyse possibilities of cryptocurrencies would be a good
opportunity to stay with the innovation.”

Regulatory uncertainty remains

While the news of this action by a major bank is perhaps encouraging, in Estonia, bitcoin is tangled in regulatory uncertainty.
Earlier this year, the country’s central bank issued a warning
against bitcoin and digital currencies calling it a Ponzi scheme,
saying “virtual currency schemes are an innovation that [deserve] some
caution”, but that it would continue to monitor their development.
Shortly after, local bitcoin trading site BTC.ee put a halt on trades, coming under pressure from Estonian authorities who challenged the site’s compliance with the Money Laundering and Terrorist Financing Prevention Act.
Said Rum:

“LHV
is a regulated bank and we take all the regulations and guidelines very
seriously […] For us, all the questions about ‘know your customer’ and
concerns of money laundering have to be dealt with before we can really
develop new bank services using new technology.”

Local enthusiasm grows

Estonians have been enthusiastic about bitcoin for some time, despite the regulatory difficulties the domestic ecosystem faces.
The
country’s capital Talinn had a successful week-long bitcoin showcase
last month, during which bitcoin advocates came together to educate
those new to the digital currency and boost its popularity.
For more on the latest developments in the eastern European economy, read our most recent report.

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