At the very end of 2020, Serbia entered the group of countries that regulate digital business by law. The Law on Digital Property (the Law) was passed on December 21, 2020, with delayed implementation for six months from the date of adoption.

An industry of the so-called "smart contracts" is based on distributed database technology or similar technologies, which, in whole or in part, automatically executes, controls or documents legally relevant events and actions in accordance with the already concluded contract (and that the contract can be concluded electronically - through that program or protocol).

The legislator left room for the provisions of the Law to be applied not only to transactions based on "blockchain" technology, created as a technological solution for the purpose of developing "bitcoin", but also to other models through which encryption is performed, i.e. coding of digital transactions.

In addition, the Law introduces the term "white paper", as a document published when issuing digital assets, which contains data on the issuer of digital assets, digital assets and risks associated with digital assets and which allows investors to make investment decisions based on information. It is a kind of counterpart to the prospectus defined by the Capital Markets Act. Creating or approving a "white paper" is not a prerequisite for the issuance of digital property in Serbia, under certain conditions prescribed by Law. The supervisory body, as the legislator jointly designates the National Bank of Serbia and the Securities and Exchange Commission, is not responsible for the accuracy and completeness of the information stated in any part of the white paper whose publication has been approved.

The segregation of regulatory competencies of the National Bank of Serbia and the SEC is separated in relation to the question of whether the subject of treatment is a virtual currency or a digital token.

Digital assets are being introduced in the field of corporate law, leaving the possibility that non-monetary investments in companies can be in the form of digital tokens - which are not related to the provision of services or performance of work; non-monetary contributions to the partnership and limited partnership may also be made in digital tokens relating to the provision of services or the performance of work. Virtual currencies cannot be entered as a contribution to a company; it can be converted/exchanged for money and paid as a company’s cash contribution. The regulations governing deposit insurance or investor protection, as well as the regulations governing the protection of financial service users, do not apply to transactions with digital assets.

The Law regulates a number of legal topics related to the performance of business in the field of digital assets, from defining digital services and the manner of their performance, the procedure for registration of service providers related to digital assets, corporate business frameworks, to the prohibition of market abuse, supervision of service providers. related to digital property and - prescribing criminal offenses and criminal sanctions related to them.

This act is actually a pioneering endeavour of regulating the digital property market, and the main achievement is its adoption, i.e. legality of activities that will certainly be a great novelty in everyday business in Serbia as of July 2021 onwards.