This was announced by Kyriacos Kokkinos, Deputy Minister of Research, Innovation and Digital Policy of Cyprus, at an event in Larnaca on digital assets, entrepreneurship and financial technology.
Kokkinos said the Cypriot authorities have a cautious approach to the use of cryptocurrencies. He drew attention to Malta, which has attracted many Cryptocurrency investors and companies operating in the Blockchain industry. However, the Maltese authorities intend to strengthen anti-money laundering (AML) enforcement to comply with the Malta Financial Services Authority’s (MFSA) strategic plan to prevent financial crimes.
“Cyprus welcomes the use of digital assets, but we still have to act very cautiously, regardless of the presence or absence of regulations governing Cryptocurrency activities”kokkinos said
Given that Cyprus is part of the European Union, when drafting a bill to regulate crypto-assets, the local government should consider the requirements of European regulators, Kokkinos said. The Cypriot authorities are drafting their own legislation to regulate Crypto-assets and may adopt it before European regulators complete their work on the regulatory framework.
“We face a dilemma: wait for the European Central Bank to finalize its own version of the regulatory framework or act on our own.The first scenario involves over-regulation of the Cryptocurrency industry. So for now, we will act on our own, following the rules. We have to remember that the Central Bank of Cyprus is subordinate to the ECB, and our task is to challenge the conservative central banks through the debate we are already having with them”kokkinos added
Last year, the Cypriot Ministry of Finance began to study the possible risks associated with the use of digital currencies, while the Cyprus National Rate Authority has begun to explore the potential of Blockchain to strengthen oversight of the gambling industry.