Lithuanian Economy Minister talks about future finance
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.