Spanish Banks Seek Instruction On AML Registration Mandate

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In Brief
  • To not miss out on a potential boom, Spanish banks are looking to offer crypto assets to their clients.

  • The registration process required for the banks to offer crypto assets is unclear.

  • It is unlikely that the process of registration will be completed before the end of the year.

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The Trust Project is an international consortium of news organizations building standards of transparency.

Banks in Spain are awaiting regulatory clarity on registering to offer services relating to cryptocurrencies. This registration would act as part of overall anti-money laundering protections.

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The Bank of Spain has an urgent list of digital currency conversion service providers. They are all awaiting instructions on how to register themselves.

Spain’s Law 10/2020 outlines the need for registration. It deals with the Prevention of Money Laundering and Terrorism Financing and outlines requirements for service providers. The law requires that the institutions account for every stage of the progress of any cryptocurrency transaction. This means from the sale, through custody and storage.

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The central bank promised in June 2021 that registration instructions would be forthcoming by the end of October 2021. At face value, it does not seem that banks would need to register themselves again. This is because they are already regulated entities.

However, they would need to alter their anti-money laundering policies to accommodate crypto assets and notify the central bank that they are planning to offer such assets.

Spanish banks getting in on crypto act

In the absence of communication from the Bank of Spain, institutions are employing their own compliance teams. Therefore, the teams’ task is to determine whether registration is necessary to provide crypto-related services.

Banks getting in on the crypto act include Spain’s BBVA Bank. It has established a commercial crypto asset business in Switzerland. In addition, CaixaBank, which has employed the services of Onyze. 

Spain has no regulations regarding bitcoin. Any bitcoin transactions fall under the rules of bartering, according to the current understanding. As a result, businesses accepting bitcoin need to make an account statement with value-added tax in Euros. 

Spain’s crypto sandbox

Overall, Spain has sought to promote digital transformation in the financial sector with a test environment or sandbox. This allows trials to operate free of restrictions, but under the supervision of the central bank, the CNMV, and the Directorate of Insurance and Pension Funds.

Only 18 out of the 67 projects involved found approval. For example, Onyze committed to the development of blockchain technology in the issuance, management, and distribution of digital tokenized investment funds.

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