PORTUGAL Trends and Developments Contributed by: Nuno Lima da Luz and Tomás Gomes da Silva, Cuatrecasas
creates a crucial window for established businesses to upgrade their operational compliance, ensuring a smooth transition to the rigorous MiCAR standards. AML Evolution and the Transfer of Funds Regulation (TFR) Enhancing traceability with Law 70/2025 The EU has consistently upgraded its AML directives, culminating in the comprehensive enforcement of the Sixth Anti-Money Laundering Directive (6AMLD). In tandem with MiCAR, the EU introduced the updated Transfer of Funds Regulation (TFR) to specifically address the traceability of digital assets. Portugal exe- cuted this EU mandate domestically through Law No 70/2025, which reinforces the national framework for preventing money laundering and terrorist financing. Law 70/2025 effectively applies the well-known “Trav- el Rule” directly to the crypto-asset sector within Por- tugal. This requires CASPs to collect, verify, and trans- mit specific identifying information regarding both the originator and the beneficiary of crypto-asset trans- fers. By mandating this immediate data exchange, the legislation ensures that digital asset transfers are subjected to the same rigorous oversight as traditional bank transfers. For businesses operating in the crypto space, these regulatory developments demand immediate upgrades to their core compliance infrastructure. Companies must implement sophisticated transaction monitoring systems, ensure interoperability with other providers to transmit Travel Rule data, and maintain detailed customer records. Failure to adhere to these strict AML requirements carries severe reputational and financial consequences under the updated Por- tuguese penalty framework. Supporting Innovation: Sandboxes and Pilot Programmes The DLT Pilot Regime The EU’s DLT Pilot Regime provides a temporary regulatory framework for market infrastructures using distributed ledger technology (DLT). This pilot programme allows authorised financial institutions to operate DLT-based trading facilities, settlement systems, or combined trading and settlement sys- tems. The regime offers legal certainty and flexibility
for innovative market participants while maintaining appropriate systemic safeguards. Portugal aligned its national legal framework with this initiative through Decree-Law No 66/2023, covering a broad spectrum of activities for DLT infrastruc- ture operators. It introduces flexibility in registration requirements for financial instruments traded on DLT- based multilateral trading systems. This legislation allows DLT market infrastructure operators to act as the sole financial intermediary for registration purpos- es, significantly streamlining back-office operations. The decree designates the CMVM as the competent authority to grant and revoke specific authorisations for operating DLT-based multilateral trading or secu- rities settlement systems. This strategic alignment ensures that Portuguese institutions can actively par- ticipate in advanced EU regulatory experimentation. It demonstrates a commitment to modernising tradi- tional financial markets through the safe implementa- tion of blockchain technology. European blockchain regulatory sandbox The European Commission’s comprehensive regu- latory sandbox for blockchain continues to support pioneering projects through its 2026 lifecycle. This pan-European initiative provides essential regulatory dialogue and legal certainty for innovative blockchain applications across various economic sectors. Fund- ed by the Digital Europe Programme, the sandbox is particularly designed to empower small and medium- sized enterprises. Recent cohorts of the sandbox showcase the remark- able diversity of blockchain applications maturing across the European continent. Selected projects suc- cessfully span the tokenisation of real-world assets, digital identity verification, supply chain traceability, and smart public services. These initiatives dem- onstrate practical use cases that could significantly impact European citizens’ daily lives, from real estate fractionalisation to secure digital voting. The sandbox’s impact extends well beyond the suc- cess of individual participating projects. By providing targeted regulatory clarity and guidance, it proactively encourages broader blockchain adoption across tra-
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