Bitcoin is Legal, Says Central Bank of Cyprus

Despite disapproving of digital currencies, the Cypriot bank says it can only warn of the risks of using bitcoin.

Feb 26, 2014 at 3:05 p.m. UTC
Updated Sep 14, 2021 at 2:08 p.m. UTC

“Bitcoin is not illegal” say anonymous sources from the Central Bank of Cyprus (CBC), according to a report by the Cyprus Mail.

The fact remains that bitcoin is in a grey area for banks – neither a currency nor a financial instrument – and the sources warned that the digital currency isn't “subject to control or regulation”.

The Cypriot bank has recently indicated disapproval of cryptocurrencies, stating on 7th February that they were not classified as legal tender:

“The CBC does not authorise any activity falling within its mandate unless legal compliance is ensured. Any activity without the required license is liable for breach of law.”

The latest statement should, therefore, come as good news to bitcoiners fearing a government crackdown to limit rampant tax evasion as people desert a banking system they see working against their interests.

In actual fact, as a member of the Eurozone, Cyprus’s banking affairs are overseen by the European Central Bank and any future legislation of digital currencies is likely to be passed down from there.

Cash crisis

During 2012 and 2013, Cyprus experienced crippling financial problems in the fallout from the Greek debt crisis. In the months that followed, it implemented a host of austerity measures, including an infamous one-time levy on all uninsured bank deposits.

Cypriots were enraged by the move, seeing it as a robbery of the people. Interest in alternative currencies rose dramatically, causing a spike in the global price of bitcoin.

The country has a history as a financial centre and, with traditional banking deemed as a failure by much of the population, some expect Cyprus will forge a new future as a centre of bitcoin use and commerce.

Since the crisis, the University of Nicosia has started accepting bitcoin for everything from tuition fees to books and meals, and is even offering a Masters degree in Digital Currencies.

More recently, the world’s first brick-and-mortar bitcoin deposit and financial services portal, Neo, opened its flagship branch in Nicosia, with the aim of being a ‘bank’ for bitcoin.

CBC image via Yiannis Kourtoglou / Shutterstock.com

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
After Armstrong Tweet, India's Crypto Policy Body Says No Contempt of Court Challenge vs. RBI

The Coinbase CEO last month suggested the RBI's "shadow ban" of crypto exchanges violated a Supreme Court ruling.

The Coinbase CEO last month suggested the RBI's "shadow ban" of crypto exchanges violated a Supreme Court ruling.

CoinDesk - Unknown
2
CoinDesk - Unknown
Portuguese Congress Rejects Two Bills Seeking to Tax Crypto

The proposals were submitted by two leftist parties. The government, which also seeks to apply taxes, hasn’t submitted a proposal so far.

The proposals were submitted by two leftist parties. The government, which also seeks to apply taxes, hasn’t submitted a proposal so far.

CoinDesk - Unknown
3
CoinDesk - Unknown
First Mover Asia: Regulatory Attention on Terra Could Change South Korean Trading Environment; Bitcoin Goes Sideways

The founders of two prominent crypto-related organizations said tightened restrictions could make it difficult for foreign tokens to list on Korean exchanges, discouraging projects from trying.

The founders of two prominent crypto-related organizations said tightened restrictions could make it difficult for foreign tokens to list on Korean exchanges, discouraging projects from trying.

CoinDesk - Unknown
4
CoinDesk - Unknown
A16z Doubles Down on Crypto Investments Despite Market Downturn, and NFL Launches Play-to-Earn NFT Game

The most valuable crypto stories for Wednesday, May 25, 2022.

The most valuable crypto stories for Wednesday, May 25, 2022.

CoinDesk - Unknown