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Spanish CNMV Still Is Concerned About Crypto Regulations. For What Reason?

Denis Goncharenko

Spain (officially, the Kingdom of Spain) is the fourth largest country in Europe and the second largest in the European Union with a highly developed economy. The country mainly develops in such areas as renewable energy sources, technology and IT, manufacturing, textiles, tourism, agriculture, etc.

Nevertheless, the global economic crisis has affected the country in late 2000s: the long-term excess of government spending over revenues led to a state budget deficit of over 11% of GDP. At that time, the foreign trade deficit was 5% of the total economy of Spain. The slowdown in the growth of the economy, which began in the spring of 2012, lasted a year and a half. Then, by the end of 2014, the country's economy began to grow faster than all other countries in Europe. Nevertheless, being one of the largest economies in the world, Spain experiences serious difficulties: public debt, extremely high unemployment, marked regional disparities which are leading to active separatism.

Some facts about the Spanish economy

  • Spain's economy is ranked 12th in the world in nominal GDP.
  • Foreign companies from the USA, France, Great Britain, etc., own more than 50% of the enterprises in the sphere of mechanical engineering and metallurgy.
  • About 40% of the share capital is controlled by the eight largest Spanish financial, industrial and banking groups.

Technological leadership in the global market

Since the second decade of the 21st century, private companies started leaving the country due to the 2008 crisis, and it led to the consequences in the form of competition and survival on the world market, which in turn has led to private investments in R&D. Despite the problems it faces, Spain successfully leads in such innovative industries as renewable energy, biotechnology, and transport. In the 2010s, Spain reached a high position in the international scientific rating — the ninth place in terms of the number of new studies.

The development of industry: the stance of CNMV on cryptocurrencies

It may seem strange enough, but today there are no adopted legal acts in Spain to regulate cryptocurrencies, although in February 2018 the party led by Prime Minister Mariano RAJOY, started working on a draft bill which was aimed to be loyal to the crypto industry.

Crypto transactions in Spain are subject to the rules of bartering under the Civil Code; Bitcoin is considered a digital good or thing. Bitcoin-accepting businesses are required to make an account statement with a value-added tax in euros. At the same time, Spain is working on introducing the blockchain into the infrastructure of its cities and other areas.

However, in January of this year, the Spanish National Securities Market Commission (CNMV) added 23 currency and cryptocurrency markets to its blacklist for trading without a license. Before that, at the end of 2018, the Council of Ministers, approved the changes in tax legislation, according to which citizens need to register all cryptocurrency assets in order to combat tax evasion. Against the background of such actions, the statements of the author of the bill, Teodoro Garcia EGEA, look quite controversial: “both public and private [blockchain and cryptocurrency-related entities provide [citizens with] guarantees of safety and reliability.”

Should the crypto industry in Spain expect a change for the better?

Recently, the CNMV confirmed that it did not allow any organizations to carry out the initial coin offerings (ICO) with the approval of the commission. On March 26, the regulator issued an official announcement in which it emphasized that the agency had so far not approved or provided any authorization for the activities of any project in the ICO sphere.

The CNMV also emphasizes that any report or other documentation sent to potential investors by the ICO must contain a disclaimer explaining that it “been subject to any type of review by the CNMV or any other administrative authority,” or any similar explanation. Any documentation related to ICO that claims otherwise is knowingly false unless the text has been formally reviewed or approved by the commission.

As for security tokens, sales below a certain threshold do not require approval from the regulator if they happen below a certain threshold. For example, issuing tokens of less than 5 mln euros, or targeting less than 150 retail investors, or in cases where the minimum investment per investor is set at least 100,000 euros.

As a result of regulatory uncertainty, to date, the Spanish cryptocurrency sector is still in a standby mode. The regulator constantly sends warnings that the initial cryptocurrency offerings are not coordinated with the authorities, but at the same time, the position of the government is merely absent. It is possible that the Spanish authorities have decided not to rush and act in accordance with the stance of the European Commission, but this only aggravates the situation. It seems that the crypto industry in Spain won’t see the green light very soon.

Image courtesy of DCEBrief

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