This jurisdiction has established a clear, favorable regulatory framework for blockchain and cryptocurrency activities. Businesses can operate with confidence under well-defined rules.
Cyprus Cryptocurrency Regulatory Overview
Cryptocurrency is legal in Cyprus but not legal tender. The country operates within the EU's MiCA regulation framework.
Cyprus Blockchain Compliance Requirements
Cyprus has established a comprehensive regulatory framework for cryptocurrency through CySEC (Cyprus Securities and Exchange Commission). All Crypto-Asset Service Providers (CASPs) must register with CySEC and comply with strict AML/CFT obligations under the Prevention and Suppression of Money Laundering Law. The country implemented the EU's Markets in Crypto-Assets (MiCA) regulation in January 2025, harmonizing crypto rules across the European Union.
Crypto Licensing Requirements in Cyprus
Crypto Asset Service Providers (CASPs) must formally register with the Cyprus Securities and Exchange Commission (CySEC) for AML/CFT purposes. The registration is mandatory for all crypto-asset operations undertaken in or from Cyprus and requires a minimum initial capital ranging from €50,000 to €150,000 depending on the class of services provided. This national regime is currently in a transitional phase, with the EU's MiCA regulation expected to fully apply by July 2026, which will introduce a harmonized licensing framework.
Cryptocurrency Tax Treatment in Cyprus
Gains from the disposal of crypto-assets are currently not subject to capital gains tax for individuals. However, a new tax reform is expected to be enacted from January 1, 2026, which will introduce a flat 8% tax on gains from the disposal of crypto-assets, with provisions for loss offset.
Crypto Banking Access in Cyprus
Regulated CASPs can access banking services. Banks conduct enhanced due diligence on crypto-related businesses. Integration with traditional financial system improving under MiCA framework.
Official Sources & Regulatory References
https://www.cysec.gov.cy/en-GB/entities/crypto-asset-services-providers-casps/, https://outboundinvestment.com/cyprus-proposes-8-flat-tax-on-crypto-gains-as-part-of-2026-tax-reform/, https://nikitapartners.com.cy/cyprus-crypto-tax-8-from-2026-a-global-perspective/, https://raphael.legal/f/mica-in-cyprus-a-guide-for-crypto-asset-service-providers
AML/CFT requirements are established and aligned with international standards (FATF guidelines).
Regulatory enforcement is predictable and fair. Clear processes exist for compliance and dispute resolution.
Disclaimer: This information is provided for general guidance only and should not be considered legal advice. Regulations change frequently. Always consult with qualified legal professionals in the relevant jurisdiction before making business decisions.