The activity of issuing and trading cryptocurrencies in Portugal is not regulated, nor supervised by the Banco de Portugal or any other authority of the financial system (such as CMVM), national or European, nor by the European Central Bank. However, the absence of regulation of cryptocurrencies in Portugal does not make the activities of crypto companies illegal in that country.
Thus, crypto companies, such as exchanges and custody services, are free to act in Portugal without suffering interference from the regulator. And with the advantage of having right next to them a giant and promising market that is developing throughout Europe.
According to information from Banco de Portugal, entities that issue and trade virtual currencies are not subject to any obligation of authorization or registration with the institution. That’s because the activity is not subject to any type of prudential or behavioural supervision.
According to Daniela Guimarães, senior associate at the law firm Antas da Cunha Ecija & Associados, located in Braga, Portugal, there is no provision for a regulation of cryptoassets. The country recently missed the deadline to overcome the national legislation of the fifth European directive on the prevention of money laundering and terrorist financing, which covers the trading of virtual currencies such as bitcoin.
The policy gathers all virtual assets and their suppliers as “required entities”. This puts the cryptocurrency industry in the same legal category as banks, payment processors, games and gambling-related services. Indeed, this means that cryptocurrency-related trades will be treated like any other.
Regulation of cryptocurrencies in Portugal restricted to European directives
To this end, the regulation of blockchain cryptocurrencies applied to Portugal is restricted to Directive (EU) 2018/843 of the European Parliament and of the Council of 30th May 2018 which amends the Directive (EU) 2015/849 on preventing the use of the financial system for the purposes of money laundering or terrorist financing and alters Directives 2009/138/EC and 2013/36/EU.
Daniela says the European Union’s concern about cryptocurrencies has been combating money laundering, tax evasion or other financial crimes using bitcoin.
She also points out that all Member States except the United Kingdom, Norway and Liechenstein signed in April 2018 the European Blockchain Partnership whose aim is to establish an infrastructure enabling the provision of digital services –of public nature – with cross-border conditions that allow security and protection of privacy.
White paper mentions €100 million fund
The European Commission launched a white paper in February this year to propose investment-oriented regulation to promote the adoption of artificial intelligence and addresses the risks associated with certain uses of this new technology. The document mentions the €100 million pilot investment fund for venture capital funds or other investors who support AI and blockchain-based products and services