Montenegro State Official: I Believe There Is a Great Blockchain Future Ahead of Us

I think the forum is great, thanks, Futurama, for organizing this event and bringing together all these people to Montenegro. I believe that they are all eager to present new ideas and share them with other people, learn other possibilities and I really appreciate that you made it come here.  Montenegro welcomes innovators for future collaborations.

I can’t tell you the exact number, we don’t have a formal register for that, the securities market is more developed, but we have information that around 400 million euro were invested from ME abroad last year, and I suppose part of it is in crypto assets.

Starting from the early two thousands I believe there is a growing interest especially among the young generation, and technically skilled population, who feel that blockchain will influence our future lives, business, and structure of the economy. I know that several forums were organized at the university level. At UDG, where I’m teaching we started a blockchain center in March of this year, with a mission to spread the ideas among young people and to popularize the idea. 

To a larger scale, it’s an educational initiative than a business entity, but the members of the university, including myself, were in China many times during the last months in order to develop some extensive collaborations with their universities and tech companies, including students exchanges and business centers cooperations.

I didn’t, due to certain political reasons and my functions, we can not expose all our assets, when I finish my turn that will be ok.

About ten years ago in the course, during the 1st semester, I split my students into small groups and provided them like 100 euro each and motivated them to invest this capital. Along with other options, I proposed them to invest in cryptocurrencies. Last year one of the students send me an e-mail, saying that if she followed my advice it should have been 10 million euro now. Anyway, I still think that blockchain is a technology that will revolutionize the economy and many other industries. This year, on 17-18 of September,  Montenegro will host a big forum devoted to blockchain and ecology. That’s a big issue in Europe and here in Montenegro as well. And I suppose in the next 10 years around 3 bln euros will be invested in ways to solve the ecological problems.

This sandbox is not limited to the blockchain tech projects, but open to many new technologies. The main idea of this sandbox is to promote innovations. That’s going to be a controlled space where projects can develop, gain a certain number of customers, though cannot get a license, which implies any banking activity, but they can explore how their particular idea survives. We will learn along with them and if they succeed they can get a license.

So far it’s not forbidden in Montenegro, but banks now are reluctant to convert crypto to fiat. Our idea is that together with Central bank and the Ministry of Finance we build this sandbox so that more people can get familiar with the idea of cryptocurrencies. It won’t happen in one day, people should learn how these things function before we promote them to the banks.  Most of the banks in Montenegro have shareholders represented by big banks in Europe. To a certain degree, they are concerned with reputational risks. But I think, this will change as well as many European countries already accept crypto payments essentially. 

Of course, we should follow European standards, as Montenegro is a country-candidate to enter the European Union, but we also can learn a lot from Chinese experience as, in my opinion, that’s a faster-developing market, the country has one of the highest acceptance levels regarding cryptocurrencies. We don’t prefer one way to another, but we have to follow EU rules. As far as I know, many Maltese investors are not happy with the current state of things, they can’t do real business anyway. We are not going to measure up to anyone else’s model, we should rather follow the philosophy of the market, which is free and open.

In our laws, all investors are treated equally. There is no distinction between residents and non-residents. 

I’m personally very content with the way how EU put it in AML legislation, which states that crypto ia a means of exchange which people accept. Our philosophy (institutional and legal framework in Montenegro) is: don’t protect someone from doing their business. When you get married, you choose your husband freely and the state shouldn’t interfere with these processes and ask how is your marriage going on. Who can protect you from making your own decision? Same works in business. Usually, rules are introduced after something extraordinary happens. And I believe the innovations in the financial market should live in compliance with existing rules and the regulation will be following. 

That’s just another way to trade, you shouldn’t protect people to make their own financial decisions.

I see a possibility for doing that, but there is no any detailed plan by now, the government should get more comfortable with the idea, first.

The first spheres where it can be implemented are those industries that attract the most attention from the younger population, like the gambling industry, ecology, financial markets capable of sustainable growth.

I consider that opportunities for the use of blockchain technology in the capital market exist primarily in the development of Global Custody and Settlement, as well as in the development of Multilateral Trading Platforms. I believe that GCS is an important part of the infrastructure for further development, bearing in mind the growing obligations and requirements towards KYC and AML. If this part is satisfactorily resolved and accepted, I think that MTF and tokenize assets can be developed on that platform. Regulatory institutions in Montenegro are willing to test those solutions in the framework of the sandbox.

I believe that blockchain is a very democratic, decentralized innovative way of communication and people will accept it easily and essentially. I believe there is a great blockchain future ahead of us.