Cyprus appears as the preferred crypto base in the EU
Earlier this month, UK-based digital bank Revolut was granted authorization by the Cyprus Securities and Exchange Commission (CYSEC) to offer crypto services across the European Economic Area (EEA) which includes Iceland, Liechtenstein and Norway.
Read on: Revolut wins crypto approval across Europe
The British FinTech unicorn, which first started facilitating cryptocurrency trading for its customers in 2017, this month added 22 new tokens that are now available to its customers in the EU and UK
More about this: Revolut adds new crypto to become super app
The news makes Revolut the latest in a string of crypto services firms to choose to route their EU operations through a Cypriot license in a bid to maintain their regional foothold and take advantage of EU passporting rules.
In March, the crypto exchange platform FTX launched in Europe through an incorporated investment company in Cyprus that is passported to the EEA, while the Israeli multinational social trading and investment company eToro has been registered in the country since 2010.
Meanwhile, Crypto.com, CMC Markets and BitPanda have all also received licenses from CYSEC.
Sophisticated, robust regulatory regime
With EU-wide legislation on markets for crypto-assets (MiCA) due to come into effect in 2024, any firm wishing to offer services related to crypto-assets will need to do so through an entity registered with an EU-based regulator such as CYSEC.
The European island nation, a FinTech favorite for its crypto-friendly regulatory regime, has proposed the “Distributed Ledger Technology Bill” that would clarify the legal status of crypto assets and create a clear regulatory framework for companies offering crypto services.
Commenting to Blockworks on the anticipated action, Kyriacos Kokkinos, Cyprus’ Deputy Minister to the President for Research, Innovation and Digital Policy, said, “By focusing on the technology sector, especially on new and disruptive technologies, such as fintech and blockchain, aims to build a new pillar in the economy that will provide economic competitiveness and social prosperity.”
And Revolut seems to see that potential. According to Altfi, a spokesperson for the company said that “by establishing a hub for our crypto operations in the EU, we recognize CYSEC’s in-depth knowledge of crypto and its efforts to be a leader in crypto regulation.”
The Neobank further said it chose Cyprus after an “in-depth examination of all EU countries”, with CYSEC chosen due to its “sophisticated and robust regulatory regime, as well as the strength of the existing crypto industry in Cyprus.”
Elsewhere, other European countries have also moved forward with laws requiring crypto firms to register with national authorities in order to offer their services.
Since May, for example, crypto platforms wishing to do business in Italy must be listed in a national registry managed by the Organismo Agenti e Mediatori (OAM) specifically dedicated to crypto asset service providers and crypto wallets.
Further reading: How payment methods, regulatory regimes are shaping Italy’s FinTech ecosystem
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