When you hear the term ‘blockchain’, you automatically think of the cryptocurrency
‘bitcoin’. But blockchain is more than bitcoin. It's a new technology with the potential to transform a growing number of areas in society and business. The manifold application possibilities of blockchain technology have made it a focus of public attention. To create legal certainty, Liechtenstein is the first country in Europe to have decided to enact a blockchain law.
Mr Casellini, you head the blockchain team at Bank Frick and work intensively with this technology. Where do you see the greatest opportunities, and where are the dangers?
The opportunities lie in a wide range of areas. But as with any technological revolution, it’s very difficult to gauge in advance which developments will be accepted by the market. We are certain that a great many industries will make use of blockchain technology to make processes more agile, independent, effective, and secure. The possibility of replacing a middleman with a technology offers almost unlimited potential.
In our opinion, the greatest risk lies with dubious providers. Clean regulation, as enshrined in the draft Liechtenstein Blockchain Act, is therefore very important for all stakeholders.
Switzerland is not planning to introduce a blockchain law. In Liechtenstein, the consultation report on the Blockchain Act was adopted at the beginning of November 2018. In your view, what is the importance of a blockchain law?
Above all, a high degree of legal certainty. Many potential providers and users currently do not dare to approach the technology because they are uncertain whether their plans can be implemented properly in accordance with the law. But if a law cleanly covers the crucial aspects and in that way increases legal certainty, this can lead to a much greater number of users in a short period of time.
Blockchain technology is changing rapidly. Isn’t there a danger in being a pioneer?
Of course, being a pioneer always entails risks. Before accepting blockchain companies, we therefore spent a lot of time analysing and optimising processes and recruiting staff. We also worked closely together with the FMA and the Government from the outset. And we have set up our processes to be as independent as possible of the technology so that we can react to changes. It is very important for us to do things right and to be aware of the risks.
Fintechs and other blockchain start-ups are popping up like mushrooms. Does the Blockchain Act attract further players, or does the law go too far in limiting the areas of application and thus the attractiveness of Liechtenstein as a business location?
The law helps to implement the cases correctly and at the same time to keep dubious players away. This new legislation does considerably raise some of the barriers to entry, which is certainly positive for us as a bank. Companies that comply with Liechtenstein legislation offer a high standard of quality and customer service, which also makes our work easier. For us, the Blockchain Act is very clearly a unique selling proposition that enables us to position ourselves very well as a bank and as a country throughout Europe.
The classic financial intermediaries have to reorient themselves due to the growing importance of blockchain technology. Bank Frick has assumed a pioneering role in this regard. How is the technology changing the industry?
Client needs are changing radically due to the possibilities of digitalisation and, as a result, the market environment for banks and other financial intermediaries is changing as well. Just take a look at how many customers the fintech revolution has gained in such a short time. So if a financial intermediary does not put clients front and centre and offer them exactly what they want, the clients are lost to the competition.
The changes brought about by technology will become even more noticeable. We are therefore convinced that the Liechtenstein financial centre, with its forward-looking, open, and modern approach to technology companies in the financial sector, has taken the right path and laid the foundation for positive change.
Mauro Casellini is Head of Blockchain and Payment Service Providers at Bank Frick in Balzers. He heads the 15-person blockchain team and played a key role in building up blockchain banking at Bank Frick.