On 6 September 2021, the Cyprus Ministry of Finance announced a public consultation on a draft law regulating matters relating to distributed ledger technology (DLT), including blockchain technology. The purpose of the draft law is to introduce in technologically neutral manner rules that will achieve a balance between the need to promote and properly use new technologies and the need to prevent money laundering and safeguard the rights of consumers.

It is noted that in June 2019, the Cypriot Council of Ministers approved the National Strategy for Decentralized Technologies-Blockchain. This strategy was drafted in collaboration with the Government, the House of Representatives, the Central Bank, the Cyprus Securities and Exchange Commission (CySEC), the Bar Association, the Association of Chartered Accountants and other experts from the private sector.

The draft Distributed Ledger Technology Law 2021 is based on the provisions of the National Strategy, and in this respect seeks to cover the following topics:

• Provision of definitions for distributed ledger technology and cryptocurrencies
• Creation of legal certainty regarding smart contracts and cryptocurrencies as an asset
• Granting power to CySEC as competent authority to issue secondary legislation, within the framework of its responsibilities for the supervision of cryptocurrency service providers

As part of the consultation the Ministry of Finance, in seeking to adopt effective regulations and procedures, is reaching out to market participants to submit opinions in regards to the proposed new rules.

In accordance with the announcement (available only in Greek) comments or opinions may be submitted in Word form at the email address psirivianos@mof.gov.cy up until 8 October 2021.

It is noted that the draft law has been made available in both Greek and English.

The press release along with links to the draft law can be found here.