Bulgaria’s legislature has taken a significant step in formalizing the status and oversight of digital assets within the country. A new legal framework specifically targeting crypto-assets has been adopted, aiming to harmonize Bulgarian regulations with established European Union directives. This move represents the first comprehensive effort by the nation to introduce concrete rules governing the crypto sector.
Establishing the Regulatory Foundation
Passed by a significant margin in the Bulgarian Parliament with 133 votes, the new law is designed to align Bulgaria’s legal system with key EU regulations. These include the landmark Markets in Crypto-Assets (MiCA) regulation, the Transfer of Funds Regulation (TFR), and the Digital Operational Resilience Act (DORA). By incorporating these EU standards, the law provides clarity and structure for businesses and investors operating with digital assets in Bulgaria.
The legislation introduces crucial definitions for terms such as “token” and “crypto-asset”, providing a clear glossary for the nascent industry. It also designates specific authorities responsible for supervision and licensing within the sector. The Bulgarian National Bank (BNB) will oversee electronic money tokens, while the Financial Supervision Commission (KFN) will be responsible for asset-backed tokens and licensing crypto service providers.
A notable feature of the new law is the provision for “passportization”. This allows a license issued in Bulgaria to be recognized and potentially valid across other EU member states, facilitating cross-border operations for regulated entities.
Industry Concerns and Implementation
Despite the positive step towards regulatory clarity, some concerns have been raised within the industry. A primary point of criticism focuses on the disparity in timelines for license issuance. The Bulgarian law stipulates a period of six months for processing license applications, which contrasts sharply with the 60 working days target set by the EU’s MiCA regulation. This divergence could potentially place Bulgarian-based businesses at a disadvantage compared to those in jurisdictions with more streamlined licensing processes within the EU.
Experts generally view this regulatory development as a necessary phase for the market’s evolution and maturity. However, they emphasize that the true impact and success of the law will ultimately depend on the effectiveness of its implementation and the administrative readiness of the designated institutions to handle the new responsibilities and adhere to efficient processes. The practical application of these rules will be key to fostering a regulated yet innovative environment for crypto assets in Bulgaria.
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