In the middle of the Mediterranean, the island of Cyprus seeks to become a major crypto hub in the European ecosystem. Driven by accommodating public policies and a dynamic university centre, the country would like to develop its digital infrastructures to strengthen its attractiveness. A future “blockchain island” on the horizon?
At the borders of Europe
With its 1,200,000 inhabitants, Cyprus intends to take advantage of its small size and its island location to develop its digital industry. Member of the EU since 2004, it is the most remote country in Europe, not far from the Middle East. Its particularly turbulent recent history places it in a landlocked position (Turkey has occupied a third of the island since 1974). Unable to compete militarily with its hostile neighbour, the country nevertheless wishes build your digital independence.
The government aims to emancipate the island by developing its attractiveness, without necessarily going through tourism. Cyprus is thus taking a digital course, with diversification as a horizon, and blockchain and cryptocurrencies as a compass. The small state also wishes to be able to relocate part of its data centers by betting on the energy windfall represented by solar energy. The resource is indeed particularly abundant in this region, geographically closer to Africa than to the European continent.
A vibrant crypto community
Cypriot interest in blockchain technology and its promising applications did not come out of nowhere. There is indeed a large crypto community. It brings together utopians, entrepreneurs and other bitcoin supporters. About 11% of the Cypriot population would be interested in cryptocurrencies. The capital, Nicosia, hosts independently organized events and workshops on a regular basis. They cover a wide range of blockchain and cryptocurrency-related areas of interest. This interactive map provides insight into local communities’ interest in cryptos.
A paradise for companies and investors?
To achieve its goals, the Cypriot state has long sought to attract investment from abroad. Cyprus is not not quite a tax haven in the strict sense of the term (member of the EU, subject to strict regulations). In fact, the country is still very attractive in terms of taxation. Maintaining historical relations with the Russian diaspora, many oligarchs fuel the economy of the island. However, the war in Ukraine has undermined this link: the Cypriot state is therefore seeking new funds to fuel its ambitions and its economy.
In a sector where everything remains to be proven, the government is thus taking some risks by investing in the blockchain and cryptocurrencies. Because even if the island is experiencing a certain boom today, the memory of the 2012 banking crisis remains intact in the minds of investors. Furthermore, the Cypriot economy is still heavily dependent on tourism. On the other hand, it can count on its impressive merchant fleet (11th power maritime in terms of number of boats, the 3ᵉ in Europe).
A state strategy in favor of cryptos
Although the law does not provide any specific framework for cryptos and blockchain, the state’s interest in these technologies is growing. Several strategic areas have been identified. Cadastre, customs, educational certification/digital certification, KYC, supply chain… So many areas that the government wishes to associate with new emerging technologies: blockchain and NFTs will have their use cases. This is already the case with the company Vechain, which specializes in traceability via the blockchain. Since 2020, it has been helping to improve the accessibility and storage of information with the country’s health infrastructures. At the financial level, the State has also given the green light for theestablishment of the neo-bank Revolut. Crypto-assets are now available for Cypriot customers.
Studying blockchain at university: a historic hub in Cyprus
The University of Nicosia is an important research center that has been studying blockchain-related technological phenomena since 2014. UNIC has established itself as a major facilitator of blockchain and web 3.0 education not only in Cyprus , but also worldwide. For the island, betting on the training offer is another way of building a soft-power digital. The department is also regularly consulted by the European Commission to produce analyzes of the continent’s crypto ecosystems. The university department offers in particular online course accessible to everyone, worldwide. The UNIC curriculum (“Introduction to digital currencies”) has been followed by nearly 40,000 students since 2014. To combine speech with action, it issues its diplomas and certificates in the form of NFT, in addition to the traditional paper diploma. .
NFT technology in fact enables the authentication of documents, thanks to its digital non-fungibility properties. In 2022, UNIC also announced a new course open about NFTs and the metaverse. It is added to the MOOC (massive open online race) on decentralized finance (DeFi). The University of Nicosia thus wishes to enrich its training offer by surrounding itself with a team of multidisciplinary researchers. This strong development is once again part of a long-term strategy. By focusing on training, the country wants to attract the brains that will build the digital economy of tomorrow.
Conclusion
Admittedly, Cyprus is a small nation. However, she dreams of innovation. Can it become a model for other crypto nations around the world? Ambitious, the island country wishes to develop its digital industry thanks in particular to the blockchain. This strategy aims to promote the country to the international community, while relations with neighboring Turkey cannot calm down. This small, relatively unknown state could well be talked about in the crypto and blockchain ecosystem. A new “blockchain island” in Europe?
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