With Britain set to leave the European Union on March 29, financial companies from Britain and elsewhere are scrambling to secure electronic money institution licenses in FinTech-friendly Lithuania to make sure they can access the EU post-Brexit, according to a report from Reuters.
The issue is urgent because Britain hasn’t come to an agreement on what will happen after Brexit, which means that companies with licenses issued in the U.K. might not be able to serve customers in the EU.
There are about 100 companies looking for the licenses, and about a quarter of them are from Britain, according to Marius Jurgilas, a member of the board at the central bank.
“It seems that the companies, many of which are quite large, are behaving like a student who only starts worrying on the eve of an exam,” he said.
Jurgilas explained that Lithuania can process a license in as soon as three months, which is why a lot of companies are applying there. Other countries’ application processes can take up to a year.
Jurgilas didn’t give the names of the companies applying, but he did say, “It is an onslaught … We do not have the resources to process all the applicants. We have to pick and choose, prioritizing the least risky applicants.”
In October, Ireland also said it saw a surge in FinTech firms looking to expand operations in its country, which is also looking at more than 100 applications.
So far, Lithuania has processed 83 licenses, including one for a payment arm of Alphabet Inc. and a digital British bank called Revolut.
The central bank, Jurgilas said, will increase its regulatory oversight as it grows, and he denied insinuations that companies chose Lithuania because its regulatory actions were soft.
“(The) European Union has institutions which make sure that market supervisors in all its countries, including Lithuania, work to the same standard, and if any Lithuanian-registered bank grows into significant size, its supervision will be taken over by the European Central Bank,” he said.