Czech authorities have adopted a law on crypto regulation and appointed the central bank as the main supervisory body

What’s new? The lower house of the Czech Parliament, the Chamber of Deputies, unanimously passed the Law on Digitalization of the Financial Market, which is designed to implement rules to regulate cryptocurrencies and strengthen consumer protection. It designates the Czech National Bank (CNB) as the main supervisory body.

Material by Prague Daily

What else is known? In addition to modernizing the financial market and making it safer, the document aims to position the Czech Republic as an attractive location for companies in the cryptocurrency and financial technology sectors.

As explained by Jan Skopeček, the deputy chairman of the Chamber of Deputies, in his X-account, the bill will remove two important obstacles to the development of the crypto sector in the country. First, it will guarantee crypto companies and crypto investors the right to open bank accounts, which will simplify their financial transactions.

Guaranteeing the ability to open bank accounts will be an important advantage for the Czech Republic, given that some countries are preventing crypto firms from entering the financial system. For example, leading US crypto exchange Coinbase has been outspoken about a campaign by the Joe Biden administration and market regulators to de-bank crypto firms. Last month, the exchange sought through the courts to produce documents related to the initiative.

Second, a three-year tax exemption would apply to crypto investments, bringing them closer to traditional assets and making them more attractive to long-term investors.

Czech authorities have approved the abolition of income tax for profits from the sale of cryptocurrencies

The amendment was unanimously approved by the lower house of Parliament and sent to the Senate for consideration

Read more

The official emphasized that many leading crypto companies have been established in the Czech Republic and should be encouraged rather than pushed out to other jurisdictions that offer more legal certainty. “It would be a shame to lose such valuable companies and investors,” he said, calling the bill necessary to keep the country competitive.

Source: X.com

Among other things, the document establishes requirements for the professional competence of service providers. They must convey to clients in clear and unambiguous terms the principles of crypto assets and the associated risks, offering sound advice.

The CNB will have the ability to impose fines of up to 50 million Czech koruna ($2,1 million) and revoke companies’ licenses for violations.

“People often invest significant amounts of money in crypto-assets, yet until now, there has been no specific legislation for these products. This draft law will enable consumer protection in this area. At the same time, it will enhance the stability of the financial environment and provide a fair framework for providers of crypto-assets,” explained Finance Minister Zbyněk Stanjura.

After adoption by the Chamber of Deputies, the bill is sent to the Senate — the upper house of the Czech Parliament — for consideration.

The Ministry of Finance introduced it in connection with the gradual entry into force of the EU-wide Markets in Crypto-Assets (MiCA) regulation, which provides comprehensive regulation of this area.

MiCA is currently considered the strictest international standard for trading virtual assets. It obliges service providers to register in at least one country in the bloc, document transactions, and take measures to combat money laundering and prevent circumvention of EU sanctions.