At a July conference, Finance Minister Harris Georgiades announced that a draft bill to regulate blockchain technology is scheduled to be ready by the end of the year.  The new law is part of the National Strategy of Cyprus for adopting blockchain technology into the private and public sectors.

Why Bring Blockchain to Cyprus?

House President, Demetris Syllouris noted that the National Strategy “will contribute to our country`s effort for digital transformation, providing the necessary framework and a road map to explore the applications of distributed ledger technology and blockchain technology in various fields, to optimize procedures, and to address any potential risks and threats.” Syllouris, further explained that this strategy will help Cyprus move forward after being largely impacted by the economic crisis.  It will “radically change the structures of modern societies, the way they are organized and their operation.” Blockchain will help businesses modernize by reducing red tape and simplifying transactions (not only monetary) in a way that is fast and still secure.

A trial of blockchain implementation will begin with the following departments: Department of Land and Surveys, the Department of Customs and Exercise, the Tax Department, and finally the Betting Authority. Once blockchain technology is successfully adopted into these industries, the financial sector will be the next in line to receive blockchain technology implementation. Georgiades will coordinate the creation and implementation of new legislation until a new Deputy Minister of Policy and Innovation begins its operation on January 1, 2020.

What is Blockchain?

“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.” Don & Alex Tapscott, authors Blockchain Revolution (2016).

In simple terms, a blockchain is “a time-stamped series of immutable record of data that is managed by [a] cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) are secured and bound to each other using cryptographic principles (i.e. chain).”

What are the advantages of blockchain technology?

  1. No Centralized Authority– Because a blockchain is an immutable shared ledger, anyone can access the information at any time. For large and complex companies such as the Forex companies found in Cyprus, this means that the workflow will become more efficient. As data sharing between departments become more accessible and quicker.
  2. Removes the Middleman– A blockchain has no transaction cost. No cost means that companies can increase their profits as they can replace business models that charge fees for transactions. For example, musicians don’t have to go through 3rd-parties (music distributors) such as Spotify to sell their music.
  3.  Transparency– According to BlockGeeks, “anything that is built on the blockchain is by its very nature transparent, and everyone involved is accountable for their actions.”

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