About 100 financial companies and
start-ups from Britain and elsewhere are applying for a license in
burgeoning fintech hub Lithuania to ensure they have access to the
European Union after Brexit, the country’s central bank told Reuters.
Britain is due to leave the European Union on March 29, but has not yet
reached a deal on a post-Brexit relationship, meaning companies with
UK-issued licenses may no longer have the right to provide some
financial services in the EU.
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The companies, a quarter of which hail from Britain, are looking to get
electronic money institution licenses, Marius Jurgilas, member of the
board at the central bank, told Reuters in an interview.
“It seems that the companies, many of which are quite large, are
behaving like a student who only starts worrying on the eve of an exam,”
he said.
He said Lithuania can process an electronic money institution license
application in as little as three months, compared to about a year in
some EU countries, giving it an advantage over other fintech centers
such as Luxembourg, Ireland or Belgium.
“It is an onslaught … We do not have the resources to process all the
applicants. We have to pick-and-choose, prioritizing the least risky
applicants,” said Jurgilas, who did not provide names of the companies
due to confidentiality rules.
Ireland’s central bank said in October that it had seen a surge in
financial services firms seeking to set up or extend their operations in
Ireland as a result of Brexit and is processing over 100 applications.
Lithuania began attracting fintech companies a few years ago, and as of
January has issued a total of 83 licenses to such firms, second only to
Britain among European Union countries, according to government figures.
The newcomers include a payment arm of Alphabet Inc’s Google and
Revolut, a British digital-only bank, and Jurgilas said the central bank
is ready to step up its oversight capabilities as the sector grows.
Jurgilas dismissed suggestions that firms were drawn to Lithuania by a benign regulatory regime.
The “European Union has institutions which make sure that market
supervisors in all its countries, including Lithuania, work to the same
standard, and if any Lithuanian-registered bank grows into significant
size, its supervision will be taken over by the European Central Bank”,
he said.
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