The New Technologies
The public are now gaining familiarity with cryptocurrencies, digital assets and blockchain technology. The potential available is more widely accepted and adopted by people all over the world with different background and needs, from US to African countries and across Europe. The increasing price of Bitcoin over the past years and the rise of new coin offerings has attracted even more attention to this subject.
This journey is still near the beginning, but it has already led to deep discussions amongst several countries, with regulators and legislators starting to take a first approach on how and who should regulate and/or tax this technology.
Registering and Verifying Authority in Portugal
Since September 2020, Banco de Portugal has been the competent authority in registering and verifying compliance with the applicable legal and regulatory provisions governing the prevention of money laundering and terrorist financing (AML/TF) in Portugal. This is relevant for; entities that carry out activities involving virtual assets, namely exchange services between virtual assets and fiat money, Virtual Asset Providers Service Providers (VASPs), and virtual asset transfer services, amongst others.
Digital Assets licensed entities in Portugal
In April 2022, Banco de Portugal authorized Bison Digital Assets, fully owned by Bison Bank to operate in Portugal in the virtual assets, custody and exchange business. There are already other entities licensed and under registration to operate in the crypto space in Portugal, including major players such as Binance.
European Level Regulation
New regulation on a European level – MiCA (Markets in Crypto Assets), will have common ground rules for all 27 European countries and is the first step to increase the level of confidence from all stakeholders and to bring additional capital to a market that presents numerous advantages.
Regulations already define, who at local level will supervise the activities related to cryptocurrencies, issue of cryptocurrencies and cryptocurrency service providers. For now other type of digital assets, such as Non Fungible Tokens (NFTs) are excluded, as some countries have not yet reached agreement on the direction to be taken.
NFTs offered to the public at a fixed price, may be tickets for a show or a videogame item. The Portuguese Market regulator (CMVM) has already stated that tokens can represent very different rights and credits and can be traded in organized markets.
The European Union understand the innovation and potential that this industry offers and the momentum gaining ever-increasing traction. Nevertheless, there are many aspects that need to be regulated in order to mitigate some of the risks that are frequently associated with this industry regarding Money Laundering, even if some of the risks are exaggerated by a number of the industry’s current critics.
Approach to Blockchain in Portugal
Blockchain is now being adopted in Portugal, in several projects, and has potential for mainstream usage in private and public organizations. In 2018, Portugal Fintech joined with Banco de Portugal, markets and insurance regulators to create ‘Portugal Finlab – where regulation meets innovation’, in order to create a platform for emerging fintech and tech companies to be able to negotiate a direct path through the existing regulatory framework.
Metaverse and Venture Capital Funding
Metaverse, according to McKinsey, represents a significant opportunity to change the way we live, connect and collaborate. This also applies to the digital assets industry, which is already included in the revolution of the industry.
Venture capital funding related to the metaverse has already hit $120 billion this year, which is a very small slice of the potential $5 trillion estimated worth of the industry by 2030. Current main metaverse uses are linked; to e-commerce ($2.6 trillion), virtual learning ($270 billion), advertising ($206 billion), and gaming ($105 billion), and offers great growth opportunities.
If you have any questions or require additional information regarding digital assets and the approach being taken in Portugal, please contact Sean Dowden, or Diogo Saraiva de Ponte at the Lisbon office of STAG: email@example.com.