Banco of Investimentos Globais (BiG), a significant Portuguese bank, has started to limit cash payments to cryptocurrency platforms, according to José Maria Macedo, co-founder of Delphi Labs.
According to BiG, the action was taken in order to adhere to the rules on risks related to digital assets that the Bank of Portugal, the European Banking Authority, and the European Central Bank (ECB) have issued.
The halt in the services comes at a time when Portugal had shown rather friendly stance on crypto, going so far exempt taxation on digital asset money.
BiG New Halt in Service Comes in Adherence to EU Rules
The notification mentioned adherence to rules on the risks of marketing digital assets that were released by the Bank of Portugal, the European Banking Authority (EBA), and the European Central Bank (ECB).
Furthermore, according to the announcement, the decision was motivated by the necessity to guarantee adherence to the nation’s anti-money laundering and anti-terrorism financing regulations.
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Portugal’s Digital Asset Laws: What Do They Say?
The Portuguese government approved the “Digital Transitional Action Plan” on April 21, 2020. The act creates “Free Zones” where crypto technologies can be tested.
These zones offer support from regulatory bodies and establish a flexible regulatory framework for testing, including on-site testing in authentic environments. when a result, when crypto companies create and test new technologies, the initiative will lessen the legal and regulatory burden they encounter.
Previously recognized for not taxing the majority of cryptocurrency earnings, Portugal started imposing taxes on certain transactions in 2023.
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Long-term holdings of cryptocurrency may be immune from taxation, however short-term holdings (less than 365 days) are subject to 28% taxation.
Portugal’s aim is to support cryptocurrency startups during their testing phases in order to boost the economy. The Portuguese government offers testing to take advantage of the new potential that cryptocurrency presents, acknowledging the significance of new technologies for economic development and the reform of economic systems.
As a result, Portugal has become a desirable location to launch a cryptocurrency firm.
EU Regulations Over Crypto Stay Tight
Regulation
Banco of Investimentos Globais’ decision to hat fiat to crypto transactions stays contrary to Portugal’s pro-crypto regulations. However, the halt comes at time when the EU laws are becoming rather strict about the crypto regulations.
The Banco de Portugal oversees cryptocurrency regulation in Portugal, licensing bitcoin service providers and establishing KYC and anti-money laundering guidelines.
A service provider must submit a business strategy, documentation of company formation, and a certificate of no criminal background in order to be granted a crypto license.
But the new MiCA rules. taxation rules and money laundering guidelines in the EU are becoming rather strict, making BiG’s move stay in tandem with that part of the globe.
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