The government of the Republic of Serbia adopted on 27th November, 2020 the Digital Property Bill in an effort to regulate, improve and develop the market and prevent the abuse of this type of property for criminal activities. Whether it be a coincidence or not, at the same time the heads of the European Central Bank announced the intention to introduce a digital euro currency.
The Digital Property Act (hereinafter: the Law) introduces new concepts such as: digital property (being a novel legal institute), digital currencies (which may include all existing crypto-currencies), and digital token (a type of digital intangible property right which can also be used as a shareholding in a newly-founded enterprise).
As a consequence, securities such as shares or bonds can also qualify as digital tokens, which opens the path for tokenising financial instruments. Please note that any tokenised shares or bonds will be subject to appropriate capital market rules.
The Law also regulates the institute of “white paper”, which is defined as a document published at the time of issuing digital property containing data about the issuer of digital property, digital property itself and the risks associated with digital property, allowing investors to survey relevant data and make an informed decision.
The equating of digital property with other types of property is definitely reflected in the possibility to constitute a lien after recording it in a register of liens maintained by a provider of services associated with digital property.
It is important to highlight that the Law requires providers of services associated with digital property to take steps and measures to prevent and uncover instances of money laundering and terrorist financing defined in the Anti-Money Laundering and Counter-Terrorist Financing Act.
The Law shall become effective 6 months after its enactment, which leaves enough time for all related by-laws to be made and for economic entities to get used to this change.
Please be reminded that the set of newly adopted tax laws, which are almost traditionally amended at the end of each year, includes the Digital Property Act which serves to partially define the rules of taxation for this type of property.
