The Spanish Congress has unanimously agreed draft legislation to regulate blockchain technology and cryptocurrencies, seen as a pro-crypto move by Spanish politicians. However, the deposing of prime minister Mariano Rajoy creates uncertainty as to when the legislation is likely to pass. There also remain concerns about stumbling blocks relating to EU compliance laws.
Playing in the ‘sandbox’
The draft legislation calls for a review of regulations covering Bitcoin, altcoins and blockchain, and proposes to make use of ‘controlled testing environments,’ or ‘regulatory sandboxes’ as they are commonly known, aimed at fostering fintech startups. Congress has also agreed to promote blockchain as a cost-efficient and disintermediated system for payments and transfers. The draft legislation raises the need for ‘proportionate mechanisms’ to ensure that all parties involved in crypto will comply with information disclosure obligations to the Spanish Treasury, and to coordinate a common regulatory position regarding crypto in the broader European context.
The Maltese Factor
These moves may now be temporaily paused while the country deals with the outing of its prime minster, and Spanish newspaper La Vanguardia has mooted political issues could delay the pro-crypto reform ‘for more than half a year.’ The draft was open to public consultation until June 7, with a final text ready for review around July 7. La Vanguardia reports that meanwhile Malta may usurp Spain’s ambitions with plans by the Malta Gaming Authority (MGA) to implement a Sandbox Environment. Though a gaming proposal, the initiative could apply to the fintech. Jaime Bofill, partner at Hogan Lovells in Madrid, told La Vanguardia that reportedly, in Malta ‘the approval of laws is not delayed as much as in Spain; they could take advantage and get the businesses that are pending to come to Spain.’