March 27, 2024
Croatia Sets Clear Guidelines to Promote Crypto Activity and Develop into an EU Passport Hub
Policy & Regulation

Croatia Sets Clear Guidelines to Promote Crypto Activity and Develop into an EU Passport Hub

According to Vlaho Hrdalo, head of the Blockchain and Cryptocurrency Association, Croatia’s blockchain sector is eager to establish itself as an EU passport hub.

The challenging aspect now is putting the landmark crypto law into effect across the 27 nations that make up the trading bloc.

That will require some time. Till the end of 2024, the Markets in Crypto Assets Regulation, or MiCA, will remain in effect. However, several EU countries are rushing to apply the law’s terms to their particular markets in an effort to gain an advantage over other governments.

Under the direction of President Emmanuel Macron, France, for instance, is creating its own rules in advance of MiCA. Additionally, Croatia isn’t holding back either.

Croatian financial regulators issued a guideline on June 30 requiring cryptocurrency companies to register with the government within 60 days. While know-your-customer and anti-money laundering practices at financial firms are currently governed by the law on anti-money laundering, the rulebook oversees the crypto registry that will be run by an organization named Hanfa.

The process of “passporting” is one of the essential components of MiCA. In the EU, financial institutions have the freedom to establish a base in one member state and then provide services to clients in other countries while still adhering to the laws of their home country.

According to Hrdalo, Croatian regulators are already drafting passporting regulations, allowing businesses to choose to establish bases in the Balkan country and offer cryptocurrency services throughout the EU.

According to Hrdalo, “In practice, this will mean greater security for service users and higher standards for service providers.”

Ivan Čizmić, a lawyer and the general secretary of the StoneBlock Blockchain Association, predicted that significant crypto companies looking for a foothold in the EU may be interested in the passporting effort.

With a population of slightly under four million, the size of Croatia’s cryptocurrency industry is unknown. A few hundred people are members of the Blockchain and Cryptocurrency Association.

According to a list of organizations submitted to regulators, there are 18 cryptocurrency enterprises registered with the authorities in Croatia.

One of those businesses is the exchange Electrocoin, which last year announced sales of €72 million. Despite the compliance procedure, its executives embrace the new crypto legislation.

Even still, according to Čizmić, Croatian regulators still have a ways to go before they can create a system that will protect the sector and be compatible with the more comprehensive MiCA system in the EU.

Digital assets are still not directly regulated by legislation in Croatia, unlike in some of its neighbouring nations like Serbia.

“The current regulation of virtual property in Croatia can be more ambitious,” Čizmić said. “It is necessary to adapt more often to technological developments and the growing demand for virtual assets, as well as the needs of the industry.”

He said that a smart place to start is to get ahead of MiCA.

Image: Wallpapers.com

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