The Ministry of Finance of the Republic of Serbia published the Bill (Draft) of the Law on Digital Property, inviting professionals and citizens to participate in consultations from October 13 to October 28, 2020.

This Draft aims to regulate the issuance, secondary trading, and provision of services related to digital assets ("crypto-assets"). Serbia seeks to become one of the few countries with specific regulations for digital property. Additionally, the Draft addresses pledges on digital property and measures to prevent money laundering and terrorist financing related to digital assets.

Here is a summary of key provisions in the Draft:

Digital Assets and Virtual Currencies:
Digital assets are defined as digital representations of value that can be bought, sold, exchanged, or transferred and used for exchange or investment. Virtual currency is a type of digital asset not issued or guaranteed by a central authority, without the legal status of money but accepted by individuals or businesses for transactions.

Exceptions:
The law does not apply to mining or transactions within closed networks.

Providers of Digital Asset Services:
Only registered companies in Serbia can offer digital asset services. Providers can offer services such as buying, selling, and transferring digital assets, asset storage, portfolio management, and more. They must obtain permits and adhere to specific registration and operational requirements.

Advisors:
While advisors do not need a permit to operate, they must inform users if they do not have one.

Issuance and Marketing of Digital Assets:
Issuers of digital assets must submit a "white paper" to the supervisory authority and publish it publicly before offering digital property. After a successful sale, issuers must notify the relevant authorities. Secondary trading and OTC transactions are allowed under certain conditions.
Virtual Assets as Company Capital:
Virtual currencies cannot be used as cash contributions to a company but may be used as non-monetary contributions in digital tokens.

Protection of Digital Assets:
Providers are prohibited from pledging or selling digital assets without prior authorization, charging hidden fees, or encouraging frequent transactions for commission purposes. They must also protect users' personal data in compliance with GDPR.

Pledge on Digital Assets:
The Draft allows for digital property to be pledged, with registration in a public provider-maintained register. The register is accessible to all, and pledges can be settled through public bidding.

Supervision:
The Central Bank of Serbia and the Securities Commission supervise the implementation of the Law, including compliance with anti-money laundering and anti-terrorist financing regulations.

For all additional questions related to this topic, feel free to contact the lawyer Tihomir Vlaović, tihomir.vlaovic@zslaw.rs or your regular contact at the Law Office Živković Samardžić.