Cyprus: Crypto-assets and the path ahead
A changing landscape
Crypto-assets are a digital representation of a value or of a right that is able to be transferred and stored electronically. They have been gaining in popularity in recent years, and Cyprus is no exception. In response to this growing interest, the Central Bank of Cyprus (CBC) has been taking steps to regulate crypto-assets in the country.
A new regulatory framework
In 2021, the CBC issued a circular that set out a new regulatory framework for crypto-assets. The circular defines crypto-assets as "a digital representation of value that is not issued or guaranteed by a central bank or a public authority, and is not used as legal tender, but is accepted by natural or legal persons as a means of exchange or payment". The circular also sets out a number of requirements for crypto-asset service providers (CASPs). These requirements include: * Registering with the CBC * Having a physical presence in Cyprus * Maintaining a minimum level of capital * Implementing robust anti-money laundering and counter-terrorism financing measures
The risks of crypto-assets
The CBC has warned that crypto-assets are a high-risk investment. The value of crypto-assets can fluctuate wildly, and there is no guarantee that you will be able to sell your crypto-assets for the same price that you bought them for. There are also a number of other risks associated with crypto-assets, including: * Fraud and scams * Theft and hacking * Money laundering
The future of crypto-assets in Cyprus
The CBC is still in the process of developing its regulatory framework for crypto-assets. It is likely that the framework will evolve in the coming months and years. In the meantime, it is important to be aware of the risks associated with crypto-assets before you invest in them. You should also only invest money that you can afford to lose.
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