Cyprus’s Security and Exchange Commission is exploring options to take advantage of financial innovation while maintaining regulatory oversight over a dynamic, and ever-changing, blockchain and cryptocurrency industry.
Due to its strategic location, Cyprus has long been a unique financial hub for Europe. Over the past few years, the Mediterranean nation has rapidly become a hotspot for cutting-edge technologies.
This has led a number of blockchain startups keen to set up shop on the island.
Now, both the University of Nicosia and the Cyprus International Institute of Management host world-class seminars and lectures on topics related to digital currency and blockchain technology.
Cyprus’s Security and Exchange Commission (CySEC) has also entered the fray, having recently established an Innovation Hub that focuses on blockchain.
Firms who pass the application process have access to specialized expertise and industry roundtables while maintaining the ability to communicate with CySEC as they work on issues related to blockchain innovation.
CySEC Chairwoman Demetra Kalogerou envisions the Hub as a place where industries can easily have a dialogue with each other and with regulatory bodies while helping CySEC get a better understanding of investment products and platforms that use DLT.
ANNOUNCEMENTS: CYSEC announces the launch of its Innovation Hub https://t.co/4nBHaj3tvr
— CySEC (@CySEC_official) July 27, 2018
Bullish On Blockchain?
In a recent interview with Finance Magnates, Chairwoman Kalogerou noted CySEC was open to speaking with experts to further understand blockchain’s benefits and risks when it comes to the financial market.
She also mentioned CySEC is a member of a project from University College London that is currently investigating the possibility of using blockchain for the automation of practices related to regulation and compliance.
Overall, Chairwoman Kalogerou pointed out how “the time is ripe” for CySEC to “formalize our approach to innovation and ensure disruption is not happening at the expense of investor protection.” Chairwoman Kalogerou also said the regulatory agency has good working relationships with other European counterparts who have “readily applicable” knowledge.
Looking Into The Positives And Negatives Of Innovation
Speaking specifically on the topic of cryptocurrency regulation, Chairwoman Kalogerou said CySEC was looking to see if more legislative requirements were needed to “ensure full investor protection.”
She said any potential actions in this area would be carefully taken as to not “act prematurely” and potentially “cause any dislocation in otherwise smooth functioning of our capital market.
So far, CySEC has published several warnings to inform citizens about potential risks associated with crypto investing, but Chairwoman Kalogerou said the agency is not necessarily going to be rushed into regulating ICOs since they are a “product set that is yet to be fully developed.”