On Wednesday, the government will discuss a draft law on digital finance, which regulates the cryptocurrency market and sets out the powers of the Czech National Bank (CNB) in supervising it. The Ministry of Finance submitted the proposal in connection with the expected entry into force of the European regulation known as MiCA, which should complement the Czech law. According to the proposal, part of the measures should come into force at the end of June and the rest at the end of the year.
Compulsory registration as protection against fraudulent practices
The European Union approved the MiCA regulation last May, the most stringent international standard yet for trading in the virtual asset market. Intermediaries will have to register in the EU and will have to collect data on sellers and buyers to prevent money laundering or make it more difficult to circumvent EU sanctions. The standard will also allow the authorities to access certain transaction data.
The European Regulation is directly effective, the proposed Digital Finance Act complements the Czech-specific rules.
CNB supervision
The proposal primarily imposes obligations on issuers and traders of cryptoassets. They will be required to submit audited financial statements to the CNB, and they will also have to regularly evaluate measures to protect the assets entrusted to them by their clients. The law also sets out the conditions of professional competence for cryptocurrency traders.
The CNB, as a supervisory authority, will have the right to impose a fine of up to CZK 50 million for a breach of the rules, or even to ban the activity of a provider of services related to cryptoassets. It will also maintain lists of crypto-asset issuers that it has authorised or authorised to operate in another EU Member State.
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