Portugal’s Bank Blocks Crypto Transfers Amid EU Regulations

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Portugal’s largest bank Banco de Investimentos Globais (BiG) has recently taken the step of blocking fiat transfers to cryptocurrency platforms, citing compliance with new European Union regulations. This marks a significant shift for Portugal, once regarded as a haven for crypto enthusiasts.

The decision aligns with growing regulatory pressure from European authorities like the European Central Bank and the Bank of Portugal, particularly in areas such as anti-money laundering and counter-terrorism financing. 

Portugal’s restrictive crypto approach can pull back its crypto users to invest in other countries dropping their economies. For now, it appears to be an independent move by BiG, as no similar announcements have been made by other banks.

Could this mark the beginning of tighter crypto controls in Portugal?

Is Portugal Becoming the El Salvador of Europe?

While BiG restricts these transfers, other banks, including Caixa Geral de Depósitos, continue to allow them. This suggests that BiG’s move is not yet a nationwide trend. Portugal, once known for its crypto-friendly policies, introduced a new tax scheme in 2023, imposing a 28% capital gains tax on short-term crypto holdings. This marks a departure from its earlier crypto-friendly policies. 

Moreover, the timing of BiG’s decision coincides with the European Union’s implementation of the Markets in Crypto-Assets Regulation (MiCA), which aims to provide a unified regulatory framework for digital assets across Europe. Despite MiCA’s push for clarity, BiG’s action shows how interpretations of these regulations can differ, even within a single country.

Crypto Reaction

Critics, including Portuguese crypto entrepreneur José Maria Macedo, have expressed concern that such restrictive measures could push users toward decentralized finance (DeFi). The introduction of crypto tax laws has only fueled this sentiment, with some fearing that these actions will drive crypto activity further underground or into DeFi platforms.

Although some countries, such as El Salvador, have reduced their acceptance of cryptocurrencies because of economic difficulties, Portugal’s changing position reflects broader global worries about the potential risks tied to digital assets.

European Divergence

Across Europe, the approach to cryptocurrencies varies. While some countries, like the Czech Republic and Switzerland, embrace crypto in their financial systems, others, like BiG in Portugal, are tightening restrictions. Despite these differences, the MiCA framework reassures that only compliant crypto platforms can operate within the EU, offering some stability and trust in the changing crypto space.

While the crypto community reacts strongly, the change could spur further decentralization in finance—as users seek alternatives to traditional banking services.