Lithua­nian Econ­omy Min­is­ter talks about fu­ture fi­nance

Global Times – Metro Beijing - - EMBASSY - By Yin Yeping

Lithua­nian Min­is­ter of Econ­omy Vir­gini­jus Sinke­vičius vis­ited China in Septem­ber. Born in 1990, he is the youngest min­is­ter of the Euro­pean coun­tries, which gives him the ad­van­tage to get on to new things. Sinke­vičius is a big fan of new tech­nol­ogy and is ded­i­cated to bring­ing about change in dig­i­tal fi­nance not only in Lithua­nia, but around the world.

The Global Times sat with him dur­ing his visit. He shared his per­spec­tives on tech­nolo­gies that are driv­ing the Lithua­nian econ­omy for­ward.

GT: Nine months have passed since the first in­ter­na­tional blockchain cen­ter in Europe, the Blockchain Cen­tre Vilnius, was of­fi­cially opened in Lithua­nia in Jan­uary. How do you eval­u­ate its per­for­mance so far?

Sinke­vičius: It’s per­form­ing great. A num­ber of com­pa­nies are en­rolled. Now Blockchain Cen­tre Vilnius im­ple­ments over 20 projects. So, there is def­i­nitely a big house for blockchain in­no­va­tors. We feel happy that it is not just the Lithua­nian blockchain com­pa­nies, but also the dif­fer­ent coun­tries and re­gions in­clud­ing Asia and Amer­ica.

GT: Lithua­nia looks like a lead­ing coun­try in dig­i­tal fi­nance in Europe and has put a lot of ef­forts into this sec­tor. What are the rea­sons be­hind this?

Sinke­vičius: First of all, it’s com­pli­ments to our na­tional bank, cre­at­ing flex­i­ble and for­ward-think­ing reg­u­la­tion, which al­lows you to tes­tify your prod­ucts in a real fi­nan­cial en­vi­ron­ment. Com­pa­nies will get ad­vice about how to im­prove their prod­ucts and avoid mis­takes as well as mis­com­mu­ni­ca­tion with of­fi­cial reg­u­la­tions, es­pe­cially in the Eu­ro­zone. This is at­trac­tive for fi­nan­cial tech­nol­ogy star­tups. We are look­ing for­ward to grow­ing it larger. Our gov­ern­ment is al­ways work­ing on this project to stay ahead. We are work­ing on in­creas­ing the flex­i­bil­ity and fos­ter­ing the is­sue of li­cens­ing.

GT: What kind of co­op­er­a­tion would Lithua­nia like to build with China in fu­ture fi­nance?

Sinke­vičius: At the mo­ment, there is a great win­dow of op­por­tu­ni­ties for bi­lat­eral trade. Lithua­nian com­pa­nies can def­i­nitely en­joy the ben­e­fits that the Chi­nese mar­ket can of­fer. Of course, for them, it is a long path to learn how to op­er­ate in this mar­ket. For us, it is im­por­tant to is­sue and per­mit all the pro­cesses to be smooth. Again, the win­dow of trade gives us the op­por­tu­ni­ties. The sec­ond thing is [to in­crease] the Chi­nese in­vest­ment. Cur­rently, Lithua­nia has in­vested six times more in China than China has in Lithua­nia. There is def­i­nitely a win­dow of op­por­tu­ni­ties for Chi­nese com­pa­nies to come and in­vest in Lithua­nia and open a win­dow to the EU and other mar­kets, which may be hard to ac­cess from Asia, but easy from Lithua­nia, be­cause Lithua­nia has a great lo­ca­tion be­tween the east and the west.

We have prob­a­bly the best de­vel­oped roads in the re­gion and our sea port, which is the largest one in the Baltic Sea re­gion. We can def­i­nitely of­fer the fast and smooth trans­port of goods through Lithua­nia. We have seven free eco­nomic zones in Lithua­nia, which gives you a great pos­si­bil­ity and tax de­duc­tion to make it easy for com­pa­nies to start their busi­nesses. It can def­i­nitely of­fer the most at­trac­tive con­di­tions for busi­ness in­vest­ments in the Baltic Scan­di­na­vian re­gion.

GT: Some see the fu­ture of blockchain as the fu­ture of dig­i­tal cur­rency, which brings about chal­lenges to real cur- rency and there­fore makes it hard to reg­u­late. Would that be part of your con­cern?

Sinke­vičius: I think we should not be con­cerned. We should see that as an op­por­tu­nity. In Lithua­nia, we see blockchain not just as an e-cur­rency, but as a pos­si­bil­ity for more open and trans­par­ent gov­ern­ments and cit­i­zen re­la­tions where your med­i­cal, land and car records can be put on safely and se­curely. We see it more as an op­por­tu­nity win­dow which gives trans­parency and clear­ance. Speak­ing of e-cur­rency, of course it brings about chal­lenges for the gov­ern­ment to ad­just and un­der­stand how to reg­u­late, but what we un­der­stand is that reg­u­la­tion can­not aban­don in­no­va­tion. First of all, you have to be grate­ful for this in­no­va­tion which is chang­ing the world and we have to be care­ful not to overly reg­u­late it in Europe or in Asia. For us, it’s very im­por­tant. That’s why we have opened up the block- chain cen­ter.

It also brings chal­lenges to gov­ern­ments. If you met peo­ple on the street five years ago, they didn’t know a word about blockchain or the cryp­tocur­rency, or the to­kens. Still, not many peo­ple know about it. For gov­ern­ment to reg­u­late it is ex­tremely hard. That’s why the gov­ern­ment has to be very care­ful with reg­u­la­tion. Be­cause reg­u­la­tion can be an ad­di­tional bur­den which stops this e-revo­lu­tion. The gov­ern­ment should in­ter­rupt only when there is a threat and so far there are more op­por­tu­ni­ties than threats.

GT: Lithua­nia has been ded­i­cated to trans­form­ing into a free-mar­ket econ­omy since its in­de­pen­dence. Do you be­lieve that work is in the gov­ern­ment’s hands or the in­vis­i­ble hands do all the work?

Sinke­vičius: I think the mar­ket does the work of course. There are ar­eas the gov­ern­ment must reg­u­late, but the com­pe­ti­tion and the mar­ket open­ness also does its work. We, as a small mar­ket some­times see prob­lems where there are not enough play­ers. Gov­ern­ment over­reg­u­la­tion can be very dan­ger­ous as well. Gov­ern­ment reg­u­la­tions must set rules so the play­ing field can be very clear and there will be no is­sues with in­ter­rup­tion and in­ter­pre­ta­tion, but at the same time, gov­ern­ment reg­u­la­tions can­not kill the ini­tia­tive. It’s very im­por­tant that busi­ness must be in­no­va­tive and aimed at creation, de­vel­op­ing new prod­ucts and ser­vices, rather than stick­ing to gov­ern­ment rules. Be­cause if all the busi­nesses think about stick­ing to gov­ern­ment rules, it’s not go­ing to be creative and it will limit busi­nesses to com­pete glob­ally.

Vir­gini­jus Sinke­vičius

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