As Spain transitions to a new government in 2019, the country’s financial regulator has reversed its stance on cryptocurrencies. The move comes in response to a growing number of crypto exchanges that have moved to the country to take advantage of lighter regulations. In the past, the watchdog has shut down a number of exchanges, and has even mandated that all crypto transactions be made in euros. However, the new Chairman of Spain’s Securities and Exchange Commission (CNMV) has now said that cryptocurrencies are not going away, and that it is better to try to regulate the market rather than try to squash it.

The Spanish financial regulator (CNMV) has announced changes to its stance on Cryptos.  The CNMV has for a long time held a tough stance against cryptocurrencies and digital tokens, but in a recent announcement, the regulator has backtracked in this position and has decided to try and embrace the crypto space.

Earlier this year, the head of the Spanish financial regulator, the CNMV, warned investors against the dangers of cryptocurrencies. But several weeks ago, the organisation took a more open-minded approach, saying that cryptocurrencies could be used to legally transfer money across borders. The change in stance came as a surprise to many in Spain’s crypto community, but its president said the CNMV was simply playing catch-up with financial trends that are evolving faster than regulators can keep up.. Read more about institutional demand for bitcoin and let us know what you think.

In a surprise decision, Spain’s market regulator has announced that it will allow investors to make investments in cryptocurrencies. The National Securities Market Commission (CNMV) has unveiled a new set of guidelines that will allow institutional investors to invest in cryptocurrencies if certain conditions are met, reports El Economista. Under the Directives, operators of investment funds, undertakings for collective investment (IICs) and open-ended collective investment companies (SICAVs) domiciled in Spain may trade in virtual assets provided the market price is based on the purchase and sale by a third party. Under this policy, CSMs and fund managers will not be able to invest funds in derivatives and securities, such as exchange-traded cryptocurrency notes (ETNs) and exchange-traded commodities (ETCs). Another condition imposed by the CNMV on fund managers is that they must clearly warn their clients about the high risk and speculative nature of investing in crypto assets. According to the regulator, companies must include these warnings in their marketing materials.

Background

The CNMV’s announcement came as a surprise, as Spanish authorities have taken a hard line on crypto assets. In April 2020, at the start of the new tax year, authorities warned digital currency holders of significant fines if they did not disclose the nature of their holdings, TeleMadrid reported. The Ministry of Finance has sent 14,800 reminders to communicate the fine. The fine for those who fail to do so can be as high as $5,900. In February 2020, Spain’s Secretary of State for the Economy, Ana de la Cueva, expressed her concerns about cryptocurrencies at the Online Fintech Summit 2021. Bitcoin and other cryptocurrencies are at risk of failure, she said, because users don’t have the standard protection that a traditional payment system does. Around the same time, the Bank of Spain and the CNMV also warned about the risks of crypto assets compared to the traditional monetary system. According to the paper, many cryptocurrencies lack the liquidity to reverse investments without incurring heavy losses. The paper also talks about volatility: According to the Commission, due to their volatility, cryptocurrencies are unsuitable to be used as a unit of account and store of value. In February 2018, the Bank of Spain and the National Securities Commission issued a joint statement noting that cryptocurrencies are not issued, registered, licensed or verified by any regulatory body….. Consequently, according to the Library of Congress, cryptocurrencies purchased or held in Spain do not enjoy the guarantees or protections provided by regulations applicable to banking or investment products.

Anti-Money Laundering Directive

Spain recently issued a decree that its legislation will now follow the Fifth Anti-Money Laundering Directive (Directive 2018/843 or AMLD5 as it is commonly referred to). The decree defines cryptocurrencies as currencies that have value in the digital space and are not issued by a central bank or government agency. The AMLD5 requires domestic cryptocurrency exchanges to register with Spanish authorities and for exchanges and funds to share customer data with authorities in Europe. It’s been a few days since the CNMV announced its new position, but not many Spanish funds have created products to attract crypto investors.Spain’s top financial regulator has issued a new report which states that there are “no reasons” for treating cryptocurrencies differently than fiat currencies. The Spanish government has previously expressed concern about the risks associated with cryptocurrencies, and the country has not yet adapted clear regulations for digital currencies. (Source: CoinTelegraph) The new report states that cryptocurrencies are an “efficient and convenient” technology, and even suggests that they could be used to make payments in the future. The report goes on to say that there is no reason to establish a cryptocurrency regulatory framework at this time.. Read more about crypto demand and let us know what you think.

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