The lack of regulations on crypto-assets and crypto-asset markets has been addressed, with Regulation (EU) 2023/1114 on markets in crypto assets (MiCA) introducing a unified legal framework at EU level. The new regime provides for the introduction of a licensing procedure for companies who want to provide services related to the trading of crypto assets. It introduces a number of requirements and obligations that they must comply with. Furthermore, a national legislative act – The Markets in Crypto-assets Act has been adopted. It introduces measures for the enforcement of MiCA on national level. In addition to that, AML regulations must also be complied with. In Bulgaria, relevant AML acts include the Measures on Anti-Money Laundering Act (MAMLA), which transposes Directive (EU) 2018/843, the Regulations for the Implementation of the MAMLA and the Measures Against the Financing of Terrorism and the Proliferation of Weapons of Mass Destruction Act. Trading with cryptocurrencies is also subject to taxation and Bulgarian Tax legislation must also be complied with. MAMLA required crypto services providers to be registered in a public electronic register at the National Revenue Agency. This registration regime, however, has been derogated by the licensing regime introduced by MiCA and implemented in Bulgaria with the national Markets in Crypto-assets Act. Entities that have been registered at the National Revenue Agency before the 30th of December 2024 may continue operating on that basis until the earlier date between the 1st of July 2026 or the date on which they receive a license in accordance with the new regime introduced by MiCA and the Bulgarian Markets in Crypto-assets Act.
The adoption of the so-called travel rule by market players has led to a noticeable outflow of some smaller clients seeking to anonymize the process and has also helped establish a distinction between fully compliant providers and the rest in the market.
Additional comments regarding the legal situation for financial services using crypto currencies or what FinTech’s must be aware of in this business area
Until recently, local banks and payment service providers had been reluctant to open bank accounts for companies operating in the crypto domain which makes it somewhat difficult to operate a crypto business in the country. However, in recent years this tendency has undergone some positive changes. Demonstration of strong compliance principles by the crypto services providers usually helps them in establishing trustful relations with financing banks.
Economic conditions
Market size for financial services using crypto currencies and biggest companies in this business area
According to Statista, revenue in the Cryptocurrencies market is projected to reach around EUR 25m in 2025. Revenue is expected to show an annual growth rate (CAGR 2024-2028) of 34.27% resulting in a projected total amount of around EUR 34.m by 2026. The number of blockchain and cryptocurrency companies and start-ups in Bulgaria has been rapidly increasing, with the current leaders on the market being Quanterall, Motion Software, LimeChain, Nexo, Zahara Consult, Industria, Cryptodesk and others.