The Serbian Parliament adopted the new Law on Digital Assets (the “Law”), which came into force on 29 December 2020 and will start applying 6 months later, in an effort to bring legal certainty to what has so far been considered a legal gap. In parallel to the adoption of the Law, the Parliament has also adopted a set of amendments to tax regulations, thereby defining the tax status of digital assets.
The Law applies to all digital assets regardless of the technology on which those digital assets are based, whereby digital (virtual) assets are defined as a digital record of value that can be digitally bought, sold, exchanged or transferred and that can be used as a medium of exchange or for investment purposes (with some exceptions, e.g. notion of a digital asset does not include digital currency records that are legal tender payments and other financial assets regulated by other laws).
There are two types of digital assets under the Law: virtual currencies and digital tokens. In addition, stabile digital assets have also been recognized whereas mining of digital assets is permitted, but excluded from the scope of application of the Law. However, subsequent disposal of acquired assets through mining is subject to the provisions of the Law.
Issuance of digital assets in Serbia is permitted, irrespective of whether white paper for such property has been drafted and/or approved. However, different rules apply with respect to advertising of the initial offering. Specifically, advertising of digital assets without an approved white paper is permitted only if: (i) it is in accordance with a by-law of the competent authority, or (ii) it fulfills strict conditions set out in the Law.
Also, secondary trading through organized platforms with or without an intermediary is permitted. Such trading may be facilitated by the use of smart contracts, to which the Law assigns the role of executing, controlling or documenting legally relevant events and actions in accordance with previously concluded contracts.
The provision of services related to digital assets is permitted upon obtaining a license from the competent authority. However, licensing is not a requirement for providing advisory services.
Pledge may be established over digital assets and is perfected by inscription in a pledge register kept by a digital assets service provider licensed for keeping a register of pledges on digital assets. In addition, the Law permits the parties to enter into a fiduciary agreement for securing receivables or for other purposes specified in such agreement.
Having in mind the above, the Law seems like a welcomed addition to a series of tech-related regulations which aim to provide legal certainty in transactions which pertain to assets created by using the new technologies. However, the Law also raises new questions, primarily related to its implementation, as blockchain was created with the purpose of excluding central and regulatory authorities from its application – we are very looking forward to tackling these issues head-on with the Serbian tech community in order to ensure seamless operations concerning digital assets.