Among others, Prince Michael from Liechtenstein is the founder and chairman of the geopolitical consulting and information service Geopolitical Intelligence Services AG based in Vaduz. As part of his work, he also deals with cryptocurrencies and Blockchain technology.
When it comes to financial technologies such as Bitcoin and other cryptocurrencies, the Principality of Liechtenstein has been striving for meaningful regulation comparatively early.
Prince Michael of Liechtenstein, you just mentioned it in your opening speech: In theory, anyone can issue their own crypto currency, there are numerous other coins in addition to Bitcoin. Is that too many?
This is typical for a new technology. There are many ideas and many players. I think that will consolidate over time. But I also believe and hope that there are many special solutions. So I think that you can design certain cryptocurrencies for specific regions and topics.
You are thinking of specific use cases?
Yes exactly. We may have some global and comprehensive [cryptocurrencies] in the future, but then specific ones. For example, if a particular region has liquidity problems, then cryptocurrencies could provide an advantage to help the local economy. There are also other possible applications – especially in the area of supply chain.
Right now, the Bitcoin price is struggling with losses. Do you think Bitcoin has a chance as a global currency?
To be honest, I do not know. I think Bitcoin is currently too limited to be a global payment system. It’s not fast enough yet. But I do not know if it is now Bitcoin, which is evolving and interspersed.
Prince Michael von Liechtenstein: “There will certainly be a consolidation”
Do you think that with the development of the application cases, the chaff separates from the wheat? Is this currently happening on the market?
I think that happens already partially. But I also believe that everything will take some time. There will be something new again. I would not necessarily say that “the wheat is separated from the chaff”. There will just be more successful and less successful [cryptocurrencies]. That does not necessarily have anything to do with quality. It may also be better market acceptance, better marketing and many other factors that matter. But surely there will be a consolidation someday.
“Now comes a disappointment phase”
This is currently the case with ICOs – they no longer have the best reputation. As a “next big thing ” in the Bitcoin ecosystem security tokens are discussed. What do you make of it?
I think of both models relatively much. We need security tokens because there is a claim to assets, that’s pretty clear. I think the problem with ICOs was that you just started to over-expect it in the beginning. And now comes a disappointment phase. But I believe it [the financing model ICO] still makes sense. Look at the financial system: In order to get money, you have to be established and big. There are a lot of others who also need financing. I think ICOs will be important for that. Obtaining money on the stock market – that can not be done by middle or small [entrepreneurs]. Financing is becoming increasingly bureaucratic.
“Monopolies have the property of becoming very static.”
In Liechtenstein, the topic of regulation of Bitcoin & Co. is rather open to European comparison. In Germany there is currently the idea to find a regulation on an international level . Do you think that’s realistic and sensible?
I think that’s realistic. The other question is whether I think it makes sense. I am a big believer in the regulatory competition. This ultimately forces regulation to become more efficient. If you have international regulation, you have a monopoly position. And monopolies have the property of becoming very static.
Liechtenstein has made itself attractive to crypto start-ups, above all through Frick Bank. What else does Liechtenstein offer crypto start-ups?
I think it’s like this: with the Financial Market Authority, we first have a regulator that supports the [Bitcoin ecosystem]. We have support in know-how from universities. We are also a very stable and entrepreneur-friendly country. In addition, we have relatively little bureaucracy. That’s a big advantage. We also have great security for businesses. After all, we are one of the first countries to have appropriate regulation [for crypto start-ups].
Have the regulatory bases already affected you? Could you already see an economic growth?
Yes. I do not know exactly what he is due to. But we have a very strong growth. It is probably a combination of different factors.