Banco de Portugal extends crypto licenses allowing two exchanges to begin operation.
In the list of virtual asset service providers on the Banco de Portugal’s official site, two entities were listed as licensed to operate within Portugal for exchange services. This is the first after the law came into effect early this year. The two entities named are Mind the Coin and Criptoloja.
In an official statement by the Banco de Portugal, the regulatory body responsible for registering entities intending to act as virtual assets service providers in Portugal approved two licenses for providing exchange services between virtual assets and fiat currencies.
This is a major milestone for Portugal as it seeks to embrace crypto adoption through a regulated and compliant space that allows a seamless interchangeability between virtual assets to fiat currencies and vice versa.
Portugal implemented the Anti-Money Laundering Directive V (AMLDV) as part of its national law back in August, 2020. The directive was a 2018 directive by the European Parliament that regulates the following entities.
Entities that carry out any activity with virtual assets/ cryptocurrency
Any entity (individuals or companies/business), that is incorporated in Portugal to carry out any activity related to crypto or virtual assets;
Other Individuals or companies/businesses, due to the exercise of activities with virtual assets/cryptocurrencies, are required to submit a declaration of commencement of activity with the Tax and Customs Authority.
Criptoloja through its CEO, Pedro Borges, told CoinDesk that the exchange filed for the license in September, 2020. This was a quick response after the recognition for regulatory supervision was made into national law in August, 2020. He also added that the Portuguese people that wanted to invest in cryptocurrencies are not confident in foreign exchanges can now utilise their services.
Balanced and Proportional Approach
This directive which is now the law in Portugal has paved way for the granting of the crypto exchange license aimed to achieve the important purpose identified in the directive which says,
‘It is therefore essential to extend the scope of Directive (EU) 2015/849 so as to include providers engaged in exchange services between virtual currencies and fiat currencies as well as custodian wallet providers. For the purposes of anti-money laundering and countering the financing of terrorism (AML/CFT), competent authorities should be able, through obliged entities, to monitor the use of virtual currencies.’
The directive by the European Parliament concedes that alternative finance and social entrepreneurship must be proportionally balanced with enough transparency to counter money laundering activities and terrorism financing. This can be seen as a forward looking policy that recognises the need to prevent illicit activities but still adopts innovation. Pedro Borges told Coindesk that crypto assets see great participation from the new generation of traders.
Ushering in a New Chapter
The regulatory recognition is an important step that will spur growth and adoption of crypto assets in Portugal. Coindesk, quoting a local media outlet, Dinheiro Vivo states that in April this year, there were five formal registration requests to the regulatory body. The space is definitely growing and private institutions recognise that there is demand in Portugal for crypto exchange services.
It is important to also realise that the European Parliament’s directive mentioned that regulatory oversight must be balanced with recognition for alternative finance and social entrepreneurship. This can be a path for DeFi and other crypto related platforms such as Non Fungible Tokens (NFTs) to find its way into the local scene.
Portugal ranks 29 amongst 45 countries in the European region for its economic freedom. This is slightly below the regional average. Portugal is definitely in search of new financial innovation to allow the Portuguese people to diversify their portfolio. The crypto asset is an alternative asset class that is appealing to the younger generation and the technology that comes with it could potentially spur better economic growth.
Source : bsc.news
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