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DLT and cryptocurrencies
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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
Although payments with crypto currencies are lately offered as an alternative way of payment in Croatia (even in some shops and restaurants), we believe it is fair to say that they remain widely unknown. To the best of our knowledge no official data on frequency of use of crypto currency is available.
Legal affairs
Obligations and requirements to provide financial services using crypto currencies described above
Cryptocurrencies remain unregulated in Croatia. According to ESMA’s advice, it seems that they should be characterised as transferable securities, and if so, they will likely be regulated under the CMA.
Additional comments regarding the legal situation for financial services using crypto currencies or what FinTech’s must be aware of in this business area
Even though cryptocurrencies remain unregulated, taxation and other financial regulations may nevertheless apply.
In addition, it is to be noted that as part of an expansive new Digital Finance Package on an EU level, the European Commission issued Proposal for a Regulation on Markets in Crypto-assets (MiCA Regulation Draft). MiCA Regulation Draft provides a bespoke regulatory framework for crypto assets not covered by existing EU financial services legislation and should replace any existing national frameworks applicable to such crypto assets. It should also establish a uniform set of rules for crypto asset service providers and issuers. MiCA Regulation Draft is expected to be adopted in the form of a regulation and should thus apply directly in all EU Member States without the need for transposition into any national laws thereof.
Economic conditions
Market size for financial services using crypto currencies and biggest companies in this business area
To the best of our knowledge, no official data on revenue, cryptocurrency transactions or users is available.
Recent developments on the market include HP-Hrvatska pošta d.d. (Croatian Post) issuing its own cryptocurrency which can be bought at a post office, and development of cryptocurrency exchanges.
Additional comments regarding the economic situation for financial services using crypto currencies or what FinTech’s must be aware of in this business area
Even though cryptocurrencies remain unregulated, Croatian Act on the Prevention of Money Laundering and Financing of Terrorism (AML Act) prescribes that virtual currency exchange services and virtual wallet custody service providers are obliged to implement AML measures in accordance with the AML Act.