Portugal’s central bank clears two crypto exchanges for operations

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Portugal’s central bank clears two crypto exchanges for operations
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  • The Banco de Portugal’s move could come as a shot in the arm for the crypto industry, which has been battling regulatory concerns in many countries.
  • While Portugal’s central bank cleared two exchanges, it doesn’t mean the bank is accepting cryptocurrencies as legal tender.
  • The bank received five formal registration requests over the past year.
It seems the wave of regulations around cryptocurrencies is shifting in the industry’s favour in some ways. After El Salvador approved Bitcoin as legal tender and Paraguay announcing plans to make favourable regulations, the Central Bank of Portugal — Banco de Portugal — has now issued operating licenses to two cryptocurrency exchanges in the country. This is the first time the country’s central bank has made such a move.

“Banco de Portugal’s supervision regarding virtual assets service providers, as determined by Law No 83/2017 of 18 August 2017, is limited to AML/CFT purposes, and does not extend to other areas of a prudential, market conduct or any other nature,” the bank said in a statement, announcing that it had recognized Criptoloja and Mind The Coin, two crypto exchanges, as official “virtual asset providers”.

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The bank also detailed what kind of services fall under its purview in the same statement. This includes exchange services between one or more virtual assets and fiat currencies, transfer services of virtual assets, safe keeping and/or administration of virtual assets or instruments that enable the control, ownership, storage or transfer of such assets, including private encrypted keys.

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According to reports, Criptoloja had first filed for the license on September 29 last year. It was a long way. Being the first regulated exchange in Portugal means a lot,” Pedro Borges, chief executive officer of the company told Coindesk. The bank has received five formal registration requests from exchanges this year, and 60 informal contacts.

The registrations make it legal for the two companies to offer exchange services to users in Portugal. Criptoloja plans to start in the next “couple of weeks”, which could give the company and Mind the Coin a headstart on businesses that will get registrations in the future. Cryptocurrency exchanges like Binance, India’s WazirX and others have shown that a first mover’s advantage can be huge in this still nascent industry.

The Portuguese central bank’s decision will also come as a shot in the arm for the industry, which can show more precedents for regulators being in favour of crypto operations. However, the bank’s clearance for exchanges doesn’t mean it’s ready to accept cryptocurrencies as legal tenders. It also doesn’t mean that the bank is recognising these tokens as a legal asset class.

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