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Global FinTech Guide
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Global FinTech Guide
Country _ Name
Ireland
SectionTitle
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
From a social perspective, the interest in crypto currencies in Ireland has certainly risen in recent years. In its 2022 Global State of Crypto Report, Gemini has found that the Irish are amongst the most 'crypto-curious' countries in the world with 18% of Irish people currently owning or have previously owned crypto currency (a similar level of ownership to respondents in the UK, US, Australia, and Germany). Ireland already has a strong reputation as a hub for international financial services and the climate appears quite healthy for firms looking to develop in the crypto space.
Working groups have also been established to promote financial services using crypto currency such as Blockchain Ireland. The expert group of industry leaders, which was set up in 2015, is focused on the promotion of blockchain technology in Ireland with over 100 organisations. Blockchain Ireland also has both a public and private sector membership which helps financial services firms engage with their regulatory requirements.
Reservations still do however remain, particularly from the regulators. In March 2022, The Irish Central bank warned of the
‘
highly risky and speculative
’
nature of crypto assets, highlighting how they may not be suitable for retail customers.
Legal affairs
Obligations and requirements to provide financial services using crypto currencies described above
Whilst Virtual/Crypto Asset Service Providers do have regulatory obligations in Ireland, as the law currently stands, there is no specific or bespoke Irish legislation which targets crypto currencies.
Rather, the principal obligations for financial services firms operating in this space are registration requirements imposed by the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021. All crypto and blockchain businesses in Ireland classified as Virtual Asset Service Providers will need to complete the Central Bank of Ireland registration process. This will apply to entities providing the following services:
exchange between virtual assets and fiat currencies;
exchange between one or more forms of virtual assets;
transfer of virtual assets, that is to say, to conduct a transaction on behalf of another person that moves a virtual asset from one virtual asset address or account to another;
custodian wallet provider; and
participation in, and provision of, financial services related to an issuer’s offer or sale of a virtual asset or both.
Any person or entity carrying out VASP activities by way of business in Ireland without registration is at risk of facing criminal sanctions to include fines (up to a max of €500,000) or in more serious cases jail time (up to 5 years imprisonment).
The activities of crypto service providers may also be read in line with existing financial services legislation, principally EU Regulations (Market Abuse Regulation, Central Securities Depositories Regulation, and the Prospectus Regulation) and EU Directives (the Payment Services Directive, E-Money Directive, and MiFID).
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Authors
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Eoghan Doyle
Philip Lee LLP
[email protected]
0
2219
Simon O'Neill
Philip Lee LLP
[email protected]
0
2219
Andrew Tzialli
Philip Lee LLP
[email protected]
0
2219
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