The Cyprus regulator wants to establish a two-way working relationship with FinTech and RegTech developments. Regulatory and financial technologies initiatives have been spreading across the globe over the past few years.

In late July of 2018, the main Cyprus financial regulator, the Cyprus Securities and Exchange Commission (CySEC), announced that it would also be creating an Innovation Hub.

The regulator assured that the Innovation Hub will be a place where both supervised and non-supervised entities, in innovative or new industries, will have an ongoing access to CySEC and to the regulatory body’s insights. By this, the regulator, presumably, means these entities will have a clearer understanding of how they should go about adhering to the regulator’s rules.

Demetra Kalogerou, Chair of the CySEC, said:

“The establishment of the Innovation Hub marks an important and exciting step for CySEC’s supervision of new and innovative Fintech companies in Cyprus. In promoting closer ties with these fledgling but fast-growing industries, we aim to best protect investors by fully understanding the risks and benefits these new products bring.”

CySEC seems to be particularly interested in distributed ledger (blockchain) technology. Since this type of innovative technology of the financial industry not only has a lot of benefits, but also brings forth a great number of risks and one of those being the money laundering risk, it is understandable why CySEC wants to get a better grasp of it.

CySEC also noted that it wants to get a better understanding of new investment products and platforms that use blockchain. Specifically, the regulator wants to take count of the risks and benefits involved in using such technology.

The Innovation Hub is expected to become functional in September 2018.