Cyprus finalizes Bitcoin draft regulation. What are they?

Saif Naqvi
Source: Pixabay

Even though Bitcoin’s price remains exposed to more weakness this year, countries around the world are still looking to advance their crypto agenda. Recently, statements made by a local minister revealed that Cyprus has finalized a Bitcoin draft regulation, becoming the latest EU country to do so.

Engaging with members of the local fintech community in Cyprus, Deputy Minister for Research, Innovation and Digital Policy, Kyriacos Kokkinos, says that a ‘very attractive’ Bitcoin bill has been drafted and the same would be submitted formally sometime in the future.

“I can tell you that Cyprus welcomes the use of digital and crypto assets, but we still need to be very careful and respect not only the regulations currently in place but also the absence of any regulations…We have drafted a very attractive bill on crypto assets, Blockchain technology and Distributed Ledger Technology, which we will submit in the future,”

According to Kokkinos, Cyprus enjoys an “enviable position” within European Union countries in terms of innovation but structural frameworks had to be respected while going forward with innovation.

“Our challenge is not being aligned with the EU, it’s about the dilemma of whether to wait for the ECB to finalize their own regulatory framework or do we go alone on our own, with the former scenario also involving the possibility of that framework being overregulated… “My answer is that we will go at it alone while respecting the rules”.

Will Cyprus steal crypto haven tag from Portugal?

The statements made by Kokkinos come during a time where European countries have looked to structure their crypto framework as institutional adoption continues to grow.

Recently, Portugal announced that they would be introducing crypto taxes, essentially removing the ‘crypto haven’ tag as the region attempts to capitalize on investments. Could this opportune window make Cyrpus the next crypto haven amongst in EU counterparts? Not exactly.

Although the Cyprus Income Tax Law and the Cyprus Tax Department have not provided any guidance on how crypto should be recognized as of yet, profits made from trading digital assets are currently subject to a corporation tax of 12.5%.

Price volatility not a worry?

Bitcoin’s price has been subject to multiple sell-offs this month as markets around the world face a period of turmoil. Its price declined by 30% during the two weeks of May, marking its biggest losing spree this year.

However, local investors seem to be unfazed by recent Bitcoin retracements. Ulrik Lykke, CEO of Cyprus-based brokerage firm Marlin & Spike, said:

“Essentially nothing has changed about Bitcoin from six months ago, in terms of its fundamental attributes, it’s just down”.