The Czech lower house of parliament passed a new law on the digitalisation of the financial market at the end of the week. The new legislation establishes rules for regulating the crypto-asset market and strengthens consumer protection, with the Czech National Bank (CNB) designated as the supervisory authority. Before coming into force, the law must still be reviewed by the Senate.
Among other provisions, the law outlines requirements for the professional expertise of service providers. Providers must be able to explain the functioning and risks of crypto-assets to customers in clear and comprehensible terms while offering well-founded recommendations. According to economists, the law ensures that cryptocurrencies are treated similarly to traditional assets.
“People often invest significant amounts of money in crypto-assets, yet until now, there has been no specific legislation for these products. This draft law will enable consumer protection in this area. At the same time, it will enhance the stability of the financial environment and provide a fair framework for providers of crypto-assets,” explained Finance Minister Zbyněk Stanjura in a press release.
All 174 MPs present voted in favour of the law, achieving cross-party support. The legislation was introduced by the Ministry of Finance in response to the EU’s MiCA (Markets in Crypto-Assets) regulation, which will take effect at the end of December. MiCA is regarded as the strictest international standard for virtual asset trading to date. Under this regulation, intermediaries must register within the EU, document transactions, and implement measures to combat money laundering and prevent the circumvention of EU sanctions.
The new law grants the CNB extensive powers, including the ability to impose fines of up to CZK 50 million and revoke a company’s licence for violations. Additionally, from January 2025, profits from Bitcoin and other digital assets will be exempt from income tax if held for over three years or if annual income from their sale does not exceed CZK 100,000.
Economists have praised the adoption of the law by the Chamber of Deputies as a significant step forward. The legislation brings cryptocurrencies closer to traditional assets and aligns their treatment with that of conventional financial instruments, making them more appealing to long-term investors.
The new law aims to modernise the financial market, enhance security, and position the Czech Republic as an attractive destination for crypto and financial technology companies.
