Cyprus: Finance and Banking

The European Parliament's Economic and Monetary Affairs Committee has approved a legislative proposal for the digital euro, a new electronic form of money issued by the European Central Bank. This comprehensive package addresses the establishment of the digital euro, its distribution by payment service providers, and the continued legal tender status of physical cash, with a pilot programme scheduled for 2027.

The Court of Justice of the European Union has ruled that banks cannot automatically refuse to open basic payment accounts solely because an applicant appears on a third-country sanctions list, such as OFAC. While such designations constitute relevant risk factors, financial institutions must conduct individual, proportionate assessments demonstrating that AML and sanctions-related risks cannot be adequately managed through appropriate measures.

ESMA has published its latest compliance table on MiCA Guidelines for knowledge and competence assessment, revealing how EU national competent authorities, including Cyprus regulators, are implementing supervisory standards for crypto-asset service providers. The update signals a shift in regulatory focus from initial authorisation to ongoing operational compliance and staff competence frameworks.