. it seems that regulators are not willing to take chances and wait for a ‘ minsky moment ’ to occur on the back of technological innovation. looking from the perspective of international financial stability, this is a highly welcome and reassuring development. treating fintech as an opportunity, not as a headache so : an opportunity or a headache? adapting the regulatory framework to ever - changing financial innovations is not an easy task. yet instead of treating this as a problem, we should see it as an ideal chance. this is exactly the strategy that we are pursuing at the bank of lithuania. a couple of years ago, our institution set out on a mission to turn lithuania into a regional fintech hub. the nordic - baltic region is known for its highly digitalised economies and financial systems. yet lithuania has managed to stand out as a particularly fintech - focused and open jurisdiction. of course, this does not undermine our core mission – to ensure stability and credibility of our financial system. looking into specific fintech - supporting regulatory elements, the bank of lithuania is one of the few central banks globally providing direct access to its payments infrastructure for non - bank financial firms. this means that fintechs can provide payment services across the euro area on their own, cutting out the middleman. in other words, innovative financial institutions are placed on a truly equal footing with established banks, fostering competition in the sector. while ‘ regulatory sandboxes ’ for interacting with new market entrants have become quite widespread by now, we have taken a step further. next year, we are preparing to launch a ‘ technological sandbox ’, codenamed lbchain. it will function as a service - based platform for cooperating with private actors both nationally and internationally. the platform ’ s central goal is developing and testing state - of - the - art solutions based on the emerging blockchain technology. being a fintech frontrunner regionally, lithuania also offers one of the most favourable regulatory environments in europe. take, for example, licensing. as we are highly speedoriented, an electronic money or payments institution licence will be ready in 3 months – compared with roughly 12 months in most other european countries. on top of this, we have introduced a unique ‘ specialised bank ’ licence, which allows fintech firms to transform themselves into banks, but with lower capital requirements. and it is not just a lithuanian licence that you get. it also enables fintechs to offer their services across europe, with basically no

vitas vasiliauskas : balancing fintech opportunities and risks welcome speech by mr vitas vasiliauskas, chairman of the board of the bank of lithuania, at the joint bank of lithuania - international monetary fund seminar " balancing fintech opportunities and risks ", rise, vilnius, 10 june 2019. * * * good afternoon, distinguished guests, innovators and leaders in financial technology, policy makers. welcome to the seminar, jointly organised by the imf and the bank of lithuania. over the years, we have successfully cooperated with the fund on a number of issues relevant to lithuania ’ s economy and financial sector. and, when it comes to fintech, we set a good precedent almost three months ago in end - march. back then, our member of the board mr marius jurgilas conducted an internal seminar on lithuania ’ s fintech experience at the imf ’ s offices in washington. today we find ourselves to be discussing financial technologies in vilnius – indeed, an appropriate follow - up. given the importance of the issue, we are deeply honoured to have imf deputy managing director mr tao zhang participating in the event. his presence is truly a recognition of lithuania ’ s achievements in the fintech domain. to help frame today ’ s debate, let me briefly depict lithuania ’ s fintech landscape from the perspective of a regulator. but first, i should perhaps explain why the bank of lithuania has put strategic emphasis on fintech. i will be frank and open : we have some very pragmatic reasons. the most important is the market concentration. the share of the three largest banks, as measured by assets, now exceeds 80 %. we also observe similar levels of concentration in key market segments, for instance, payments. this drives us to encourage new participants. in a truly competitive market, the incumbents can never feel at ease, because there ’ s always someone ready to take your slice of the pie. indeed, the free and dynamic market may be a harsh place. but it is best at providing the consumer with the highest quality services at a fair price. needless to say, for a public authority, promoting the benefit of consumers is one of our key goals. — being an integrated regulator, the bank of lithuania has developed a wide range of instruments to attract new players and stimulate competition. in fact, i find the recent guidance provided by the imf to well reflect our methods. this is particularly the case with the bali fintech agenda