The year 2023 got off to a frantic start in the financial world, with recent occurrences affecting Silicon Valley Bank and other banks among them. Along with many other advantages, one of the main advantages why one should consider trusting their money with Electronic Money Institutions (EMIs) is the fact that they are required to keep their clients’ funds  at a central bank. Consequently this makes them safer in some respects compared to the traditional banks, which only insure the deposits up to a certain amount. As a result EMIs have grown to be a trustworthy and secure alternative for managing your finances.

In Lithuania EMIs keep client funds separate from their own operational funds by holding them in segregated accounts at a central bank. As a result, client money is kept safe and is not exposed to risks associated with an EMI experiencing financial difficulties or becoming insolvent. 

Unlike traditional banks, EMIs can only create electronic money equivalent to the funds they have received from their consumers and do not create credit. Therefore EMIs are a safer choice for holding money because of their reduced exposure to credit risk and fractional banking.

EMIs are renowned for their cutting-edge and approachable digital systems that enable safe and effective money management. In comparison to certain traditional banks, EMIs can provide better protection against unwanted access and cyber risks by utilizing cutting-edge encryption technologies and multi-factor authentication.

Under the direction of the Bank of Lithuania, EMIs in Lithuania function in accordance with strict guidelines that guarantee the stability and security of the financial system. These rules include adhering to stringent anti-money laundering requirements, retaining sufficient capital, and executing effective risk management strategies (AML) and countering terrorist funding (CTF). The Bank of Lithuania keeps a careful eye on EMIs’ operations in order to add another level of regulation and control and guarantee compliance.

All things considered, EMIs in Lithuania offer a secure environment for maintaining and safeguarding funds due to the availability of segregated accounts at the central bank, the absence of credit creation, strong regulatory control, and cutting-edge security measures.