Central Bank Of Cyprus Does Not Like Bitcoin
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| collaboristablog.com |
Over on Japan-based Mt. Gox, one of the major exchanges for trading the virtual currency, withdrawals have been halted and the price has dropped.
Several thousand miles away on the tiny island of Cyprus, the central bank has weighed in on the virtual currency too, and it’s not happy.
Throughout this year, Cyprus has been touted in the media as fertile ground for Bitcoin growth. Remember that, since March, it’s had capital controls in place, leaving residents cash-restricted.
That left Bitcoin with a potentially starring-role. In November the University of Nicosia in Cyprus said it would accept bitcoin as payment for everything from tuition to rent to books at the bookstore and meals in the cafeteria. It even started offering a Master’s course in virtual currencies.
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| Bitcoin has been gaining popularity in Cyprus. |
“Well, it’s a very exciting prospect. I have to say that personally I’m still learning regarding this bitcoin phenomenon because I think it’s a very interesting phenomenon on a global scale. And it’s very interesting and encouraging that a private university in Cyprus has been bold enough to take this step,” Mr. Georgiades told CNBC in December.
There was even talk in local media of a Bitcoin stores being opened across Cyprus.
Now the central bank has weighed in, and it doesn’t like Bitcoin at all.
It said in a statement (in Greek) Friday that it “does not approve any activity that falls within its purview, unless it can ensure the legality of that activity. Activities without the necessary licensing are in breach of legislation.”
So, is the institution – accused of failing to control the economy on the tiny Mediterranean island and allowing rampant tax avoidance and money laundering- saying Bitcoin is illegal?
Not quite. Instead it warns that there are big risks associated with using the currency.
As an example, it cites the absence of legal guarantees around the ownership of Bitcoin, high volatility in its price, and possible use of Bitcoin for “abuse for illegal activities.”
Where does this leave the keen Bitcoin holders in Cyprus? Warned, but still legal, it seems.
blogs.wsj.com/moneybeat
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