The Cypriotic government is currently looking into the possibility of including smart contracts in their future strategy. It’s projected that the strategy will be focusing on regulation of blockchain technology & smart contracts in Cyprus.
CySEC is investigating the possibility of using DLT for monitoring OTC markets. It’s also participating in the BARAC project implemented by the UCL. The goal of the project is to explore various approaches to regulation of new business models in the fintech industry of Cyprus. Also, with the aim of promoting technological innovation in Cyprus, the IFF has recently been established.
Cyprus: Cryptocurrency Regulation
Because cryptocurrencies are recognized as legal tender in Cyprus, there’s no plans to prohibit their use or impose restrictions on registration of crypto companies in Cyprus.
After conducting an audit of cryptocurrencies, CySEC has come to the conclusion that they hold a big potential; it has also identified crowdfunding platforms as a possible vehicle for funding startups in Cyprus. Hence, exchanging services/products for digital currencies & registering crowdfunding platforms in Cyprus will be possible in the future.
Startups & innovative businesses are increasingly looking into the possibility of raising funds through launching an ICO in Cyprus. Launching an STO & IEO in Cyprus is also an attractive option for established companies. To be eligible for offering investment tokens in the Republic of Cyprus, companies must be public & issue a prospectus.
Following FATF recommendations, CySEC is exploring the possibility of amending the national legislation with respect to:
- exchange of cryptoassets in the Republic of Cyprus;
- transfer of virtual assets in the Republic of Cyprus;
- provision of financial services related to the sale of crypto assets in the Republic of Cyprus.
Cyprus: E-payment Systems Regulation
PSDII has given a powerful boost to the development of e-payment systems in Cyprus. From now on, payment service providers are required to provide their customers with an opportunity to access their accounts via banking APIs.
In 2018, the RTS came out thanks to which tech support for customers have been significantly improved. Due to having to comply with the CBS’s stringent licensing requirements, e-money institutions are continuously coming up with efficient payment methods.
In response to keen interest shown to blockchain & cryptocurrencies, the government is promoting the development of innovative financial technologies by providing market participants with new incentives.
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