The announced law intended to regulate the electronic money market could provide an answer to whether Montenegro can become a crypto paradise.
While waiting for the law, transactions are taking place on crypto exchanges, real estate is offered for cryptocurrencies, there have been attempts at cryptocurrency mining, and the first crypto ATM has been installed.
The government initially established and later dissolved the Directorate for Cryptocurrencies and Blockchain. After coming to Montenegro, the so-called king of cryptocurrencies, Hjeong Do Kwon, was arrested and awaits extradition on international warrants for fraud.
The founder of one of the major cryptocurrencies, Ethereum’s Vitalik Buterin, obtained Montenegrin citizenship, and the Central Bank (CBCG) negotiated cooperation with the crypto and blockchain solution provider Ripple.
Cryptocurrency analyst Novak Svrkota, when asked about the presence of significant names from the crypto industry in Montenegro, which lacks regulations and a developed market in this area, mentioned that it is a relatively small but well-connected community.
“The idea arose to create a crypto paradise in Montenegro. The crypto community is looking for a small, open country that could enact crypto-friendly laws because the current laws in some countries are quite restrictive,” said Svrkota, who was part of the government’s Directorate for Blockchain.
Cryptocurrencies are digital currencies that do not have a physical form like banknotes or coins. Bitcoin, the most well-known cryptocurrency, was introduced in 2009, initially worth only a few cents, reaching its peak in November 2021 at $69,050. Today, it is valued at $42,680.
Bitcoin is just one of many cryptocurrencies, and all of them are related to the blockchain system of transactions. Blockchain is often depicted as a virtual ledger on the internet where information about conducted transactions is recorded.
The current Prime Minister, Milojko Spajić, first mentioned that Montenegro would enter the cryptocurrency business when he was the Minister of Finance in the government of Zdravko Krivokapić in 2021. That’s when the Directorate for Cryptocurrencies and Blockchain was formed.
In 2022, a conference on new technologies and blockchain was held on Luštica, an exotic peninsula near Tivat, attended by the founder of Ethereum, Vitalik Buterin.
Later that year, Buterin was granted Montenegrin citizenship, and the Krivokapić government announced that he would “contribute to the development of the blockchain industry and the Montenegrin economy.”
Spajić then met with the executives of the company JAN3, which is also involved in cryptocurrencies, and the event was attended by Filip Karađorđević, the prince of Serbia.
“It was discussed how the leading cryptocurrency Bitcoin can help Montenegro harness its hydroelectric potential,” was reported.
In 2021, the CBCG agreed on cooperation with the crypto and blockchain solution provider Ripple to develop a pilot program for launching the first digital currency in Montenegro.
“The introduction of digital currency or a national stablecoin, i.e., a stable currency, is another step forward in the digitization of financial services and expanding the availability of financial services to citizens,” the CBCG statement said at the time.
