At the very end of 2024 the Bulgarian Council of Ministers approved a draft Crypto-Asset Markets Act (CAMA) and introduced it to the Parliament. CAMA shall implement in the national legislation the EU Regulation on Markets in Crypto- Assets (MiCA), as well as the regulations on information accompanying transfers of funds and transfers of certain crypto-assets and on the operational resilience of digital technologies in the financial sector.
Currently, the only requirements, related to the functioning of crypto-asset markets, which are not financial instruments, are those introduced for the purposes of the measures against money laundering and terrorist financing. For this reason and given the significant volume of regulation already introduced at EU level, such new law should have been developed by the government.
Draft CAMA Highlights
As expected, the Financial Supervision Commission (FSC) will be the national competent authority for the purposes of regulating and supervising the activities of crypto-asset service providers, issuers of asset-backed tokens and issuers of crypto-assets other than asset-backed tokens or electronic money tokens. This will ensure a unified supervision of all activities related to the trading of crypto-assets, which aims to support the effective and lawful functioning of the crypto-asset market and its future development. Using the existing expertise and supervisory practices of FSC, no additional costs are expected to arise, which would result from the creation of a separate new specialized state body. The Bulgarian National Bank (BNB) is designated as the competent authority with respect to the activities of issuers of electronic money tokens. The permissible coercive administrative measures are defined, as well as the procedure for imposing administrative penalties, including the guarantee of the right to judicial appeal.
Crypto-asset service providers registered in the current register under Art. 9a of the Anti-Money Laundering Measures Act at the National Revenue Agency may continue to provide the services registered in the register only on the territory of Bulgaria until 31 December 2025.
Legislative Process
As amendments and additions are also proposed to a number of other laws (Credit Institutions Act, Payment Services and Payment Systems Act, Financial Supervision Commission Act, Financial Instruments Markets Act, Public Offering of Securities Act, Insurance Code, Social Security Code, Anti-Money Laundering Measures Act and other regulatory acts in the field of financial markets), the draft CAMA was distributed by the Parliament Chairperson among the corresponding four Standing Committees (on Legal Matters, EU Matters and EU Funds Control, Economy Policy and Innovations, Labour and Social Policy) and the Budget and Finance Committee was assigned as the main Rapporteur Committee on the bill.
The next stage of the legislative procees requires the consideration of the draft CAMA by the four Standing Committees that shall afterwards submit motivated reports to the Parliament Chairperson and the Chairperson of the main Rapporteur Committee. The reports on the bill shall be presented to the Parliament for the purposes of the first reading not later than two months following its submission.
Then, the bill and motives thereto, as well as the report of the main Rapporteur Committee shall be made available to the Parliament Members not later than 24 hours before the beginning of the sitting at which the bill will be considered. The bill is generally put to the vote twice at two separate sittings /i.e. bill is adopted in two readings/. During the first reading, the bill is debated in its entirety. The Parliament Members may submit written motions for amending the bill that has been adopted at first reading. The Budger and Finance Committee shall submit to the Parliament a motivated report that contains the filed motions together with the Committee’s opinion thereon, as well as the proposals of the Committee. The Parliament debates and adopts the bill at the second reading chapter-by-chapter, title-by-title or paragraph-by-paragraph.
Finally, the adopted act is sent to the President of the Republic of Bulgaria for signing a decree for its promulgation. Unless returned by the President to the Parliament for further considerations, the act is promulgated in the State Gazette and shall come into force after three days.
Conclusion
CAMA will have a positive effect on financial innovation and the financial sector, encouraging the spread of new crypto products and technologies in Bulgaria. The interests of crypto-asset holders and clients of crypto-asset service providers will be most effectively and reliably protected. The exercise of powers by FSC and BNB reduces the risk of consumers being provided with misleading or false information. Given the supervisory experience of both institutions, it will be possible to promptly identify violations and fraud and take the fastest and most effective actions possible to eliminate them. The presence of a clear legal basis for crypto-assets in the EU and Bulgaria would allow companies and issuers of crypto-assets to innovate and compete on equal terms in the single market, as well as to use the advantages of new forms of payment, without reducing the level of consumer protection and financial stability.
When CAMA will become effective Bulgarian legislation mostly depends on the Parliament agenda and priorities. It may be assumed that the process will be finalised by the end of 2025.
