Cyprus and the Bitcoin Battle - The latest developments


The local bitcoin marketing company in Cyprus Neo & Bee Ltd appears unabated by the little initial success of the recent opening of its first physical branch in Nicosia and continues to be rigorously pursing its aim to transform how bitcoin is used on the island of Cyprus and also hoping to be able to expand its operations outside of the country in the future.

It is worth pointing out that Neo and Bee appear to have managed to bring on board certain important individuals in Cyprus, who seem to be recognizing the vision of the company and the potential prospects for the country. According to a local newspaper, the Financial Mirror, a senior academic in the financial education sector said that despite the high risks involved, there is an opportunity present for Cyprus and therefore he maintains that “Our authorities, such as the financial services watchdog CySEC, should seriously consider regulating the sector, both to inform consumers about the risks involved and also to stay ahead of the pack as a jurisdiction that is trying to diversify its gamut of financial services.”

Despite such calls however, those with the decision making powers and authority in Cyprus, i.e. the government officials and regulating bodies seem to be baffled about what to do with bitcoin usage and its regulation and it appears that they have not yet decided whether they consider the virtual currency a hazard or a blessing. CySEC and Central Bank of Cyprus representatives during a hearing at the Commerce parliamentary Committee said that they are awaiting guidance on the matter from their EU counterparts.

Local press comments on this as a change in tune, remarking that “The fact that the Central Bank of Cyprus, that has twice labeled the krypto-currency as an “anathema”, has now toned down its stance to one of “let’s ask the EU authorities” is an indication that after an initial dismissal by a small segment of investors, the bitcoin may be more welcome than before.”

The views expressed during the parliamentary hearing seem to convergence on the fact that there is a need for good reliable information to be available to the public on the issues surrounding the bitcoin and its usage. Indeed Neo and Bee Chief Operations Officer Yiorgos Papageorgiou is reported to have told MPs during the hearing that the bitcoin “is a new method of transaction, which, contrary to conventional trading, is decentralised and anyone can transact with anyone else, without the interference of third parties.”

“This is a new system which, however, is based on technologies that have been around for 35 years,” Papageorgiou said, adding that his company has already approached the central bank and CySEC and has briefed the Finance Ministry “so that we can explain what this new technology is all about and the challenges involved, so as to make sure there is a proper regulatory environment.”

In typical Cypriot manner however, soon after the parliamentary hearing, the Ministry of Finance and the Ministry of Energy, Trade and Tourism, as well as the Central Bank of Cyprus issued a statement pointing out the five key risks involved in bitcoin transactions, while CySEC also issued a warning about investing in the virtual currency.