Cryptocurrencies have been steadily gaining popularity in Moldova, a former Soviet republic that is economically and politically on a crossroad between East and West. The local crypto community has recently announced developments reflecting this trend – a new exchange and a new token have been presented, both labeled “Made in Moldova”. Add to that an indirect permission from the central bank.
Also read:Another Post-Soviet Jurisdiction Welcomes Crypto Miners
10 Cryptos, 8 Currencies
Drachmae Market will be trading 10 digital coins initially, including leading cryptocurrencies like Bitcoin Core (BTC), Bitcoin Cash (BCH), and Ethereum (ETH), as well as a couple of Moldovan tokens like Zozo coin and Drachmae’s own DTMI token. The trading platform also supports transactions of eight fiat currencies, among which euros, dollars, rubles, and of course, Moldovan leu (MDL). Drachmae Market, set up with the help of the local Digital & Distributed Technology Moldova Association (DTMA), has been announced as the country’s first crypto exchange. It is already accepting subscriptions.
DTMA was created in the beginning of this year to facilitate the implementation of distributed ledger technologies in the country’s economy. It is also closely working with Moldovan authorities and regulators on a proposal to establish a special tech zone with tax breaks and incentives for blockchain startups. A similar project has been realized successfully in another former Soviet republic – Belarus, where a growing number of fintech companies are now taking advantage of their membership of the Hi-Tech Park in Minsk.
The news about the launch of Drachmae Market, which came out from a major blockchain and cryptocurrency event hosted by the Moldovan capital, was covered by both local and foreign crypto media. On Friday, the World Blockchain and Cryptocurrency Summit in Chisinau welcomed participants and speakers representing communities from countries across Europe and Asia, from Lithuania to India, according to Cryptovest. Founder and president of DTMA Lee Gibson Grant announced at the conference that the exchange had received a notice from the central bank, which could be interpreted as an indirect permission to operate legally.
In the letter presented at the summit, the National Bank of Moldova basically says that as there is currently no legal framework regulating cryptocurrencies in the country, no authorization is needed to provide crypto trading services, Mybusiness.md reports. At the same time, Drachmae Market will have to comply with the country’s anti-money laundering and counter-terrorism financing laws because it offers trading pairs with fiat currencies. This means its operator is required to share financial data about money flows and processed transactions.
Central Bank Softens Stance
The correspondence also indicates some softening of the central bank’s position on cryptocurrencies. Last fall NBM released a statement to clarify its stance warning that cryptos are neither issued nor guaranteed by a central bank or a government agency. The bank acknowledged that the “virtual currency represents digital value” and is “used by individuals or legal entities as an alternative to cash,” but stressed that “it is not tied to the national currency.”
“The use of virtual money is not regulated in Moldova. [Cryptocurrency] is not a form of electronic money in the context of the Law on Payment Services and Electronic Money, and the activities of issuing [digital coins] and executing transactions with them are not controlled by the competent authorities,” NBM pointed out.
The financial authority listed a number of risks, to which crypto users are exposed, including fraud, high commissions, loss of funds, market volatility, and last but not least – no guarantees that merchants would accept cryptocurrencies. Cryptos in Moldova, however, are becoming more popular with both users and merchants. For example, a large furniture store in Chisinau announced in December that it had introduced bitcoin payments.
Moldova still has to catch up with strong regional competitors. Ukraine has a rapidly developing crypto sector whose expansion recently prompted the country’s securities commission chief to state: “The point of no return has been passed.” Moldova’s own separatist region, the unrecognized republic of Transnistria, has adopted crypto friendly legislation that legalizes mining and provides incentives for foreign investors in the sector. Pro-crypto sentiments are also strong in Moldova’s closest neighbor, Romania.
Do you expect Moldova to quickly catch up with its neighbors in its crypto development? Share your thoughts in the comments section below.
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