Limassol: The future of payments depends on trust, said CySEC Chairman, George Theocharides, and CBC's Executive Member, George Karatzias, during their speeches on cryptoassets trends at the Cryptocurrency, Digital Assets and the Future of Finance Summit 2026, entitled 'Money in Transition: Reshaping Payments for a Digital Generation', held on Tuesday in Limassol. The two officials emphasized the importance of supervision amidst a structural transformation in the financial markets.
According to Cyprus News Agency, Theocharides highlighted that cryptoassets are no longer operating at the periphery of financial markets. Instead, they are becoming increasingly embedded within the broader financial ecosystem, interacting with traditional instruments, regulated intermediaries, and institutional investors. He stressed that this is not a temporary trend but a structural shift in how markets are organized, how assets are structured and issued, and how investment exposure is accessed.
CySEC Chairman noted that digital assets are being absorbed within mainstream traditional financial intermediation channels rather than operating outside them. He pointed out that these developments have raised critical supervisory considerations regarding valuation integrity, custody arrangements, liquidity risk, and market manipulation in underlying spot markets. From a regulatory perspective, the goal is not to replace existing systems but to ensure that new technologies operate within the same core principles of financial regulation.
Theocharides emphasized that MiCA (Markets in Crypto-Assets Regulation) represents a landmark development in global financial regulation. For the first time, a comprehensive and harmonized framework has been established for crypto-asset issuance and service provision across a major economic area. MiCA provides greater legal certainty, reduces fragmentation across Member States, and establishes a solid foundation for supervisory convergence, signaling a clear policy choice that innovation in digital finance should occur within a regulated environment prioritizing market integrity, financial stability, and investor protection.
He further stated that regulation must be technology-neutral, focusing on risks, outcomes, and behavior rather than specific technologies. Regulatory frameworks must be robust enough to protect investors and ensure market integrity while remaining flexible to allow innovation and competition to flourish. Supervisory convergence and international cooperation are indispensable.
Theocharides noted that Cyprus, as a member of the European Union and the Eurozone financial architecture, is well-positioned to act as a bridge between traditional financial services and emerging digital finance. Over the past decades, Cyprus has developed a strong and credible regulatory framework for investment services, fund management, and capital markets activities, fully aligned with European standards. At the same time, it has achieved a growing engagement with financial innovation, including fintech developments, digital assets, and new market infrastructures.
George Karatzias, Executive Board Member of the Central Bank of Cyprus, focused on the fact that digital money is no longer theoretical but has become part of the architecture of finance. He stressed that innovation in money requires supervision and that Europe must ensure that the future of payments remains anchored in public trust.
Karatzias outlined the Eurosystem's aim to shape and ground a European, sovereign, and integrated digital asset ecosystem around central bank money. This aims for a balanced landscape where public and private forms of money coexist, each contributing to a more efficient, resilient, and competitive European financial system. He noted that stablecoins are increasingly used as a bridge between traditional finance and crypto markets, highlighting that scale brings responsibility, and responsibility requires supervision.
Through MiCA, Europe has established a comprehensive framework for crypto-assets, introducing requirements on authorization, transparency, disclosure, supervision, market integrity, and consumer protection. The European philosophy is one of regulated innovation, and if stablecoins perform a monetary function, they must meet a monetary standard of resilience, transparency, and accountability.
Karatzias pointed out that the stablecoin market remains overwhelmingly foreign currency-denominated, with euro-denominated stablecoins playing only a minor role. For Europe, this raises questions of currency substitution, external infrastructure dependency, and monetary sovereignty. Properly regulated euro-denominated stablecoin initiatives may therefore have a role to play as part of a broader European architecture underpinned by trusted public money.
According to Karatzias, the broader transformation of payments and market infrastructures is why Europe has chosen to respond by building the legal, supervisory, and institutional foundations for responsible innovation. He mentioned the digital euro, designed to work seamlessly with commercial bank accounts to provide a pan-European retail payment option, reducing dependence on non-European payment solutions and strengthening resilience and autonomy.
The ECB plans to run a 12-month pilot in the second half of 2027 to test a beta version of the digital euro, including real-life situations such as in-shop or person-to-person payments. Further clarity is expected from the ECB soon on the potential participation of Cypriot market participants interested in the pilot. Karatzias concluded that while the future of money may be digital, programmable, and instant, it must remain safe, interoperable, and anchored in the euro to preserve trust not only in payments but in money itself.