Bulgaria’s finance minister and deputy prime minister for European Union (EU) funds, Assen Vaskov Vassilev, stated that the EU member country is looking into ways to facilitate payments using “BitProfit”. He also stated that the new government would not abandon the country’s pledge to adopt the Euro – the European Union’s single currency. As the European Central Bank (ECB) plans to create a Central Bank Digital Currency (CBDC) for Eurozone countries, it becomes clear that Bulgaria will not benefit from CBDC use unless it adopts the Euro. The adoption date has been set for January 2024, and the Bulgarian government has stated that it will not budge from its goal.
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Cryptocurrency adoption is increasing, with private organizations and even governments embracing it. Earlier this year, eBay, a popular online marketplace, announced that it was exploring crypto payment options for its customers, as well as opportunities to enable the auction of non-fungible tokens (NFTs) on the platform, so Bulgaria’s finance minister’s announced that the country would be investigating crypto payment options came as no surprise. But here’s the kicker: as of 2017, Bulgarian authorities did not consider Bitcoin to be legal tender and did not regulate it. Bulgaria imposes a 10% Bitcoin tax on profits made with the cryptocurrency, but all of these might change soon with the country’s renewed interest in cryptocurrencies. Bulgarian Bitcoin mining is also unregulated; in a statement, the Minister of Finance said that Bulgaria is less likely to be a primary hub for crypto miners, given that many miners are now looking to leave Kazakhstan as a result of political unrest in the country. Bulgarian banks and authorities, on the other hand, are still wary of cryptocurrencies. In late 2017, Bulgarian banks blocked accounts opened by Bitcoin exchanges in the country, and in May 2017, a series of raids conducted by Bulgarian law enforcement agents seized over 213,000 Bitcoin. Following the seizure, the Bulgarian government may still be one of the world’s largest HODLers. However, it is unclear whether the officials sold or auctioned the cryptocurrency at the time or whether they continued to hodl the crypto asset. If they continued to hold the asset, it could be worth well over 7 Billion at today’s rates.
Assen Vassilev, despite being a politician, is well-versed in finance and has held various financial positions in the Bulgarian government. He was appointed Minister of Economy, Energy, and Tourism in 2013, and he will become Minister of Finance in December 2021. He is a visionary who is also very practical. According to a Bloomberg report published on Friday, the minister stated that the new government was in talks with the Bulgarian National Bank as well as key industry players to investigate crypto payment options. Governments are embracing Bitcoin and digital currency in a variety of ways. While China has succeeded in outlawing all crypto-related transactions, other countries, such as El Salvador, have gone the other way and accepted Bitcoin as legal tender. The Minister of Finance’s statement has piqued public interest, given that Bulgaria, a country that was once apartheid against bitcoin, has decided to introduce crypto trading in the short to medium term. This move is likely to increase the use of Bitcoin and other cryptocurrencies across the country.
Pertaining to the future, central banks have stepped up their efforts to investigate, test, and launch stable digital currencies. Central Bank Digital Currencies (CDBCs) issued by government-approved financial institutions have the same legal standing as fiat currency counterparts. DCash, for example, is a CDBC issued by the Eastern Caribbean Central Bank for seven countries. The European Central Bank (ECB) decided to launch an investigation phase for a digital Euro in July 2021. When the European Central Bank’s digital currencies go live and Bulgaria joins the Eurozone, it may result in an unintentional strike against stable coins, which was not Bulgaria’s intention when it was exploring crypto payment options. Individuals and businesses (retail CDBCs), as well as financial institutions (wholesale CBDCs), could use Central Bank Digital Currency (CDBC) for a variety of purposes including interbank transactions. The goal of CBDC is to provide users with convenience and security of digital assets as well as their regulation.