By
Chimamanda U. Martha
April 19th, 2024
Drafting the regulations hasn’t been without challenges and Minister Kokkinos did not neglect to mention those faced by the country.
There are suggestions that Cyprus has finalized a draft regulation for cryptocurrencies. According to reports, the country is also set to implement the framework before any other European nation. Deputy Minister for Research, Innovation and Digital Policy Kyriacos Kokkinos stated this at a meeting with the local fintech community in Larnaca.
While acknowledging Cyprus as a leading innovation hub, Kokkinos noted there was a need to balance innovation with regulation. He 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.”
Kokkinos emphasized the need for caution since the island nation was a member state of the European Union. He noted that it wasn’t concerned with aligning with Europe or not. Instead, he stated the country’s dilemma had to do with “whether to wait for the ECB to finalize their own regulatory framework or go alone.” “My answer is that we will go at it alone while respecting the rules,” he added.
The deputy minister revealed the legislation has been published and interested parties are welcome to review it. The Cyprus government also invited a New York-based firm to help facilitate the implementation of the regulations.
Drafting the regulations hasn’t been without challenges and Minister Kokkinos did not neglect to mention those faced by the country. He especially pointed out the disagreements between the executive and the Central bank of Cyprus. “Central banks tend to be conservative and our job is to challenge them,” he concluded.
G7 Calls for More Comprehensive Regulation
Meanwhile, financial leaders of the G7 have urged countries to ensure the development of comprehensive regulation of cryptocurrencies in their countries. According to Reuters, the team released a draft communique to that effect while it met in Koenigswinter, near Bonn (Germany).
The call became necessary came in the wake of the crash of algorithm-backed UST and LUNA. The market downturn wiped out 15-25% off the market value of many major cryptocurrencies. An estimated 2.5 million South Koreans lost their life savings in the incident, with eight committing suicide.
“In light of the recent turmoil in the crypto-asset market, the G7 urges the FSB to advance the swift development and implementation of consistent and comprehensive regulation,” G7 finance leaders said.