Could Cyprus be the new “Blockchain Island”?

Earlier this month, the Finance Minister of Cyprus, Harris Georgiades announced that the government is in the middle of drafting a blockchain bill that should be ready by the end of the year.

The new legislation is expected to simplify the integration of blockchain and DLT technology into the country’s digital economy whilst making it more transparent and accessible. Cyprus, which is already well known for its thriving financial services industry, needs solidified and transparent blockchain legislation to be able to retain its popularity.

Georgiades stated that the benefits of blockchain technology such as fast transactions, low fees, smart contracts, and the ease of facilitating cross-border transfers outweigh any concerns about security. He added that the government is planning to launch a pilot project in the near future that will utilise blockchain technology within the departments of land and surveys, customs and excise, the national betting agency, and the national taxation agency.

But the foundations of Cyprus becoming the new and next Blockchain Island were already laid in December 2018. A number of EU Member States, Cyprus included signed a declaration that would facilitate collaboration on a number of blockchain and DLT projects. In addition to this, Cyprus also teamed up with a Singapore-based blockchain company called VeChain that aims to increase the development and adoption of blockchain technology.

The Cyprus Securities and Exchange Commission (CySEC) has also been exploring the possibilities that blockchain has to offer and they recently announced a new blockchain innovation hub. Demetra Kalogerou from CySEC said “the time is ripe to formalise our approach to innovation and to ensure disruption is not happening at the expense of investor protection”.

The private sector has also expressed interest in blockchain and crypto and an NGO was created called Cyprus Blockchain Technologies. Members of the joint working group include The Bank of Cyprus, KPMG, and University College London. The aim is to support research into the possibilities of blockchain technology, within the financial sector.

Asides from governmental and private sector ambitions for blockchain, the Cypriot education system has also moved into the world of blockchain. The University of Nicosia has launched the world’s first master’s degree for digital currencies as well as the first certified online course for blockchain and crypto (MOOC).

Enrollment manager at the University, Irene Patrikios said that over 25,000 students have taken the MOOC and an additional 50 have enrolled in the masters course. These graduates, she said “are the only people in the world with full academic poof that they know what they are talking about”.

All of these programmes, initiatives, courses, and regulatory plans are firmly cementing Cyprus’s future as a hub for blockchain businesses. But in the meantime, that hasn’t stopped businesses flocking to the country to start setting up and a number of entrepreneurs have already moved there to kick-off their ambitions.

Apart from the very friendly crypto and blockchain environment, Cyprus offers a range of advantages for those looking to set up any kind of business in the country. Corporate tax is fixed at just 12.5% making it one of the lowest in Europe. This combined with relatively few regulatory demands and limitations means that the island is hugely popular with digital, fintech, financial and tech start-ups and SMEs.

If you are looking for an EU base with low taxes and a welcoming and flexible regulatory regime then Cyprus could be the perfect choice for you. To find out more about company incorporation, bank accounts, Forex, licensing, and even matters relating to operating a crypto or blockchain business, contact us today.