The legal position of cryptocurrencies like Bitcoins etc. is neither defined nor stable in many countries and for this reason it varies considerably from country to country. Though most countries do not consider the use of cryptocurrency transactions illegal still their status as money vary on the basis of their different regulatory rules. On one hand various countries have clearly allowed the use of Bitcoins in trading activities whereas on the other hand other countries have restricted or banned its usage in regular transactions. For this reason the courts, government departments and agencies have differently categorised cryptocurrencies like Bitcoins etc. In this write-up legal status of the usage of cryptocurrencies by the tourists in Cyprus is discussed in brief.
According to a report submitted by Cyprus Mail, anonymous sources from Central Bank of Cyprus or CBC have said that Bitcoin is not an illegal cryptocurrency. But this fact can also not be ignored that most banks are suspicious about Bitcoins as neither they consider it as a financial instrument nor a currency. Main reason behind this suspicious status of this digital currency can be because nether it can be regulated nor controlled.
The usage of cryptocurrencies has also been disapproved by the Cypriot Bank as they are not recognised as legal financial tender even by CBC. According to the bank, any activity that falls within the jurisdiction of CBC cannot be authorised unless it ensures the compliance of legal formalities. Any activity can be termed as violation of law if it is performed without valid license.
The users of Bitcoin, fearing from the government action to control their tax evasion for deserting the banking system of the country if they do not take care of their interests, may take such statements as good news.
In fact, baking system of Cyprus is managed by the European Central Bank, being the member of Eurozone. Only European Central Bank is authorised to pass any legislation in future regarding the usage of cryptocurrencies in Cyprus.
Crisis of cash
In fact, as the consequences of the crisis of the Greek debt, financial status of Cyprus crippled in 2012 and 2013. In order to face this financial crisis a number of strictest measures were implemented by CBC in the following months which included the levy of infamous one-time tax on all the bank deposits that are not insured.
But this move was not appreciated by Cypriots as they considered this step as robbing their customers. it dramatically increased their interest in alternative currencies like Bitcoins etc. which has increased its price all over the world.
Cyprus is known as a financial centre since time immemorial but most of its population consider its traditional banking system as a failure. For this reason some people expect that Cyprus will emerge as a new centre of cryptocurrency transactions in near future.
Since the financial crisis in Cyprus digital currencies like Bitcoins are accepted by the University of Nicosia for providing every facility to its students including books, meals and fees for all the courses including Masters Degree. Recently Neo, the first brick-and-mortar portal for Bitcoin deposit and financial services of the world, has opened its branch in Nicosia. Similarly, the tourism department of Cyprus has also started accepting cryptocurrency transactions from the tourists.
But according to the data collected by BitInfoCharts, huge fees charged for the usage of digital currencies is another big problem for their users. According to them, at present people are on an average paying $28 for each cryptocurrency transaction.
It has been claimed by a Bitcoin user on Twitter that for sending Bitcoins worth $25 to the other Bitcoin user he has to pay $16 as transaction fee.
In order to discuss the soaring prices, fees and speed of the Bitcoin transactions the community of cryptocurrency users all over the world including Cyprus is organising debates.
The Cyprus tourists who are using Coinbase, a cryptocurrency exchange, have to bear transaction fees for the transferring Bitcoins from one account to some external address of Bitcoin user.
In this way, since financial crisis in the country the tourism industry of Cyprus has started accepting cryptocurrency transactions as a method of payment from its tourists, though they have to pay fees for such transactions.