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FinTechs belonging to this category offer financial services using crypto currencies. This category also includes FinTechs utilising blockchain and distributed ledger technologies (DLT) upon which Bitcoin and Ethereum are based, among others. FinTechs develop and do research in this field in order to create new services – e.g. crypto currency exchange markets, wallet providers, NFTs-related services, new payment services, "smart contracts" or new clearing and settling services.
Introduction
Attitude of the country towards financial services using crypto currencies
Payments with crypto currencies are lately offered as an alternative way of payment in Croatia (even in some shops and restaurants). Cryptocurrencies are gaining more and more popularity in Croatia. For example, according to the information from Eurobarometer survey on retail financial services and products from October 2022, the proportion of respondents who report owning cryptocurrencies in Croatia was 16%, being one of the highest proportions among EU member states.
Legal affairs
Obligations and requirements to provide financial services using crypto currencies described above
Cryptocurrencies (virtual currencies) are only regulated by Croatian Act on the Prevention of Money Laundering and Financing of Terrorism (AML Act) (Official Gazette number 108/2017, 39/2019, 151/2022). AML Act describes virtual currencies as a subtype of virtual assets that represents a digital representation of value that is not issued by nor guaranteed by a central bank or public authority, is not necessarily linked to a legally established currency, and does not have the legal status of currency or money, but is accepted by individuals or legal entities as a means of exchange, and can be transferred, stored, and traded electronically. According to the AML Act, legal persons and craftsman which are involved in transactions with virtual assets listed in the AML Act are subject to the AML regulation and need to implement relevant measures prescribed thereunder. In addition, HANFA maintains Registry of virtual asset service providers, in which all such entities need to be registered in order to provide respective services.
Apart from the above, no other legislation in relation to cryptocurrencies (which are not considered to be financial instruments in accordance with CMA) is currently applicable in Croatia. However, this will be changed once the Markets in Crypto-Assets Regulation (“MiCA Regulation”) becomes applicable.
Additional comments regarding the legal situation for financial services using crypto currencies or what FinTech’s must be aware of in this business area
Although MiCA Regulation has entered into force, it shall start to apply on 30 December 2024, with exception of certain provisions which will become applicable on 30 June 2025. It will provide a bespoke regulatory framework for crypto assets not covered by existing EU financial services legislation and will replace any existing national frameworks applicable to such crypto assets. It will also establish a uniform set of rules for crypto asset service providers and issuers. In addition, in Croatia, there is a draft law that aims to implement the MiCA Regulation which is currently in the public consultation process.