Bank of Spain Calls On VASPs To Register

Bank of Spain Calls On VASPs To Register

Last updated on December 4th, 2022 at 10:12 pm

The Central Bank of Spain is launching a new set of registrations that target virtual currency service providers (VASPs). The new guidelines will also impact banking institutions operating in the country.

The Central Bank of Spain seeks to address the issue of money laundering under these new guidelines. To ensure compliance with Anti-Money Laundering (AML) requirements, VASPs and banking institutions must register with the regulator. The firms should submit their registrations using an electronic registry.

The new requirements by the regulatory body were published on October 19th and they seek to include all financial institutions that deal in digital assets.

In the announcement, the bank stated that

“all individuals and institutions providing virtual currency exchange services need to register. This includes institutions that offer crypto trading and custody services.”

The banking regulator further stated that this would be a fresh round of registration that all VASPs and banks that offer virtual currency services need to adhere to.

As such, the regulator stated that registration requests need to be submitted “regardless of whether they are also registered in other administrative records in the Bank of Spain or other related authorities.”

Furthermore, the registration requirements also extend to firms that do not have their end customers in Spain. Individuals offering these services have also been called to register through the electronic registry or mail.

One of the things that financial institutions are being required to address when seeking this new registration is the efforts they have put in place to curb money laundering and other illegal activities such as terrorism financing. The financial institutions need to have taken measures such as gathering client information and verifying this information.

The announcement also noted that the Bank of Spain wouldanalyze the collected data to determine whether any of the VASP’s pose a risk by promoting illicit activities.

Moreover, the bank will also analyze the types of clients these VASPs have, the countries where these firms operate, business practices, the trading volumes and more.

The Bank of Spain had initially announced its plans to establish strong AML laws for VASPs earlier this year. Hence, the recent announcement has been expected by virtual asset service providers operating in the country.

Crypto Regulatory Framework in Spain

The crypto regulatory framework is not very harsh because, despite regulatory bodies working towards eliminating the promotion of illicit activities using cryptocurrencies, these bodies have also created a conducive environment for crypto trading.

In August this year, lawmakers in the country came out to support a legal initiative aimed at legitimizing the crypto sector. The lawmakers intended to do this using a new bill that addresses digital transformation.

This bill was brought before the legislative body by the People’s Party in Spain.

The bill’s objective is to promote innovation in the sector and ensure a conducive environment that will encourage innovation by regulating emerging technologies such as blockchain and cryptocurrencies.

Part of this bill proposed that the country legalize the use of cryptocurrencies and blockchain technology in the mortgage and insurance sectors.

Under this proposal, property owners will have a chance to make their mortgage payments using cryptocurrencies. It will also allow real estate companies to develop their crypto or settle on one cryptocurrency specifically for mortgage payments.


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