Cyprus draft attractive crypto framework

GB Market Commentary 20/05/2022

by Marcus Sotiriou

Despite U.S. equities falling yesterday, with the S&P closing the day down 0.58%, Bitcoin climbed just above $30,000, where it has consolidated for around 20 hours. This could be a sign of crypto decoupling in the short term from equities, as investors see the $28,000 to $32,000 range as great value.

MicroStrategy CEO Michael Saylor thinks that the UST stablecoin collapse will accelerate regulations of stablecoins and security tokens, which will have a positive impact on the industry. I agree with Saylor, as an event of this magnitude forces governments to act fast with providing regulatory clarity.

Cyprus are making strides to providing clarity with crypto laws. The Cyprus government has prepared its own draft legislation to regulate crypto assets. According to a government official, they are likely to adopt it before Europe completes a common regulatory framework.

According to the Deputy Minister for Research, Innovation and Digital Policy, Cyprus has an “enviable position” in the EU when it comes to innovation, with the second-best progress last year. He also said, “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.” I think this approach of embracing innovation whilst respecting current EU laws is smart and could result in attracting more GDP as the crypto industry grows.