Bank of Portugal awards just two cryptocurrency licenses
The Bank of Portugal has awarded just two licences to cryptocurrency dealers out of five applications.
It has lead to criticisms that the supervisor and regulator is dragging its feet and “waiting nine months for a license to be considered is an eternity” when it comes to financial markets.
And it took nine months to issue the licenses for currencies like Bitcoin. The two dealers that have received them are Cryptoloja based in Estoril and held by Smart Token, Lda. And Mind the Coin, held by Guimarães & Matosa, Lda, based in Braga.
Both companies provide “exchange services between virtual assets and fiduciary currencies” such as the euro, according to the Bank of Portugal.
The two licenses were granted at a time when deadlines were coming to an end. If they had not been granted, the licenses would have been tacitly acknowledged. According to legislation, the supervisor has six months to respond but the time is counted in weekdays and there were applications made to the Bank of Portugal as far back as September 2020.
At the end of September, each Bitcoin, the most valuable cryptocurrency in the world, was worth €9,151. Last week it was listed at €31,590 while in mid-April it achieved an all-time high of €50,000.
It means that companies that are prohibited from operating in Portugal because their licenses have not yet been approved, have lost out on riding the crest of the wave afforded by the increase in value of the cryptocurrencies over the past few months.
At the end of April, the supervisor told Dinheiro Vivo that five formal applications for licenses had been made from a total of 60 contacts received by the Bank of Portugal. From September 2020 the Bank of Portugal is responsible for supervising and regulating companies that trade in virtual assets to prevent money laundering and financing terrorism.
Covered by these responsibilities are those companies that operate in the exchange of virtual assets (cryptos) and fiduciary currencies or exchanges between one and more virtual assets.
Also under supervision and regulation are companies that provide “virtual asset transfer services and services of detaining and administrating virtual assets or instruments that permit their control, detention, storage or transfer of these assets, including private cryptographic keys.”
New rules arising from an EU directive that has already come into force in many EU countries and should have been transposed to national legislation in Portugal by 10 January 2020.
Apart from the delay, the transposition did not foresee a period of transition by which companies operating in the market would have time to make their applications to the Bank of Portugal.
It was only at the end of April that the Bank of Portugal published a notice with the regulations governing applications for the registration of these asset classes which caught the sector by surprise.
The delay from the Bank of Portugal has received criticisms from companies and the Portuguese Association of Blockchain and Cryptocurrencies (APBC).
The fact that there is no transition period in Portugal as there has been in other EU countries has scared off investment in the sector in Portugal which the association estimates employs around 2,000 people in Portugal.