Estonian bank hires virtual currency expert to develop products like bitcoin

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Last updated on June 13th, 2014 at 03:04 pm

Officials and experts at financial institutions and central banks have pondered that these institutions could very well gain and profit if they were to institute their own type of virtual currency akin to bitcoin and litecoin. However, it would defeat the purpose of bitcoin because it’s decentralized and a central bank-owned digital currency would be centralized.

It was reported this week that Lohmus, Haavel and Viisemann (LHV), an Estonian financial institution, has hired Asse Sauga, a digital currency expert who was brought on board to offer his expertise in the development of products and services for digital currencies similar to bitcoin.

According to the article by ERR, one of the very first things that Sauga took part in was analyzing today’s long list of cryptocurrencies, including bitcoin, litecoin, namecoin, peercoin and dogecoin. This would give the bank professional insight into this flourishing market.

He also explained that the current Estonian laws state virtual currencies fall into the legal framework that is in place, while also being subjected to a valued-added tax (VAT), unlike other foreign exchange currencies such as the euro.

“If you look at Bitcoin’s software then you will find the root systems of a bank,” Sauga said, who noted that financial services can be built through the bitcoin protocol, while the banking system’s future will consist of the revolutionary technology.

Various financial institutions all over the world have been accessing the services of digital currency experts. NewsBTC reported that Capital One recently posted an online job advertisement looking for a candidate who has experience, qualifications and required understanding of the peer-to-peer decentralized virtual currency.

Although some banks are open to the idea of bitcoin, other financial institutions are quite wary. For instance, the Bank of Montreal made global headlines earlier this year when it was discovered that the bank was shutting down bitcoin-related business accounts soon after the Canadian government identified the risks and threats posed by the virtual currency.

Capital One also closed a company’s bank account because the client had apparently just mentioned the alternative currency. Rob Gray, CEO of Mulligan Mint, told CoinDesk that he was not given any warning whatsoever.

“Nobody seems to know who makes decisions there, the local branch gave us nothing, merchant services told us our account was cancelled for selling bitcoin and they were not interested in discussing the issue further,” Gray told the bitcoin news publication late last year.

Bitcoin has been gaining some momentum over the past month as its price has surged from less than $400 to as high as $650. However, this week, the currency’s value has dipped back down to around the $600 mark.


CoinBuzz provides news and analysis on Bitcoin and other digital currencies. Founded in 2014, the site has quickly become a leading source of information on digital currency technologies, businesses, markets, and regulation.

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