The new Crypto Assets Billwhich was submitted by the Council of Ministers to the National Assembly on 31 December 2024, aims to create clarity and stability in the legal framework regulating the activities of crypto asset service providers and token issuers. This bill is in response to the European Regulation on Markets in Crypto Assets (Regulation (EU) 2023/1114 also known by the abbreviation MiCA), which has entered into force and must be transposed by Bulgaria as a member state of the European Union.
Regulation (EU) 2023/1114 is part of the European Union's digital finance strategy, which aims to prepare the Union for the digital age and foster innovation, while protecting consumers and investors. The regulation introduces transparency and accountability requirements for crypto-asset service providers, including rules on licensing procedures, capital requirements, and consumer protection.
In addition, Regulation (EU) 2023/1114 aims to prevent the use of crypto-assets for illegal activities such as money laundering and terrorist financing. The new bill is expected to facilitate investment attraction and create a more favorable environment for the development of blockchain technologies and crypto-innovations in Bulgaria.
Attention should be paid to the fact that the draft law refers to Regulation (EU) 2023/1114 when defining certain concepts:
- Криптоактив‘crypto-asset’ means a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology;
- Доставчици на услуги за криптоактиви‘crypto-asset service provider’ means a legal person or other undertaking whose occupation or business is the provision of one or more crypto-asset services to clients on a professional basis, and that is allowed to provide crypto-asset services in accordance with Article 59 of the Regulation (EU) 2023/1114;
- „издател“ ‘issuer’ means a natural or legal person, or other undertaking, who issues crypto-assets.;
The powers and functions of competent authorities. The Financial Supervision Commission will serve as the national competent authority for regulating and supervising the activities of crypto-asset service providers and issuers of crypto-assets, excluding asset-backed tokens or electronic money tokens. The Bulgarian National Bank will oversee the activities of issuers of electronic money tokens.
With the introduction of the new regulation for crypto-assets in accordance with Regulation (EU) 2023/1114, Bulgarian companies will benefit from the advantages of European regulation, creating a more secure and reliable market for crypto-assets. Decentralized ledger technology has the potential to improve efficiency in the traditional financial sector by securely recording information in an immutable format and providing transparency for all network participants. A clear legal framework for crypto-assets in the EU and Bulgaria will enable companies to innovate and compete on a level playing field, using new forms of payment, without compromising consumer protection and financial stability.