CZECH REPUBLIC Law and Practice Contributed by: Stanislav Šimek, Vojtěch Mlynář and Jakub Dostál, BADOKH
BADOKH 28.října 767/12 110 00 Prague Czech Republic Tel: +420 222 937 515 Email: info@badokh.com Web: www.badokh.com
1. Fintech Market 1.1 Evolution of the Fintech Market The Past 12 Months
made history as the first central bank to publicly pur - chase crypto-assets. Artificial intelligence AI was the dominant trend of the past 12 months, becoming the leading investment priority across the sector and the most active area in start-up formation. The Next 12 Months AI will likely continue to dominate, with AI agents and autonomous systems moving into live deployment. This will influence mainly new business models such as regtech and robo-advisers. Clear crypto-asset regulation may attract foreign cryp - to-firms as well as legacy players. Banks are actively exploring the convergence of traditional finance and digital assets, though progress is expected to be slow. 2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models Fintech activity in Czechia is most prevalent across the following verticals: • crypto-assets – exchanges, OTC dealers, peer- to-peer solutions, stablecoins and tokenisation initiatives, with currently only a few service provid - ers holding a licence in Czechia to operate as a crypto-asset service provider; • payment services – QR-based payment mecha - nisms and payment gateways; • personal finance – buy-now-pay-later, retail invest - ing and robo-advisory platforms;
Czech fintech has established itself as a strategic segment of the economy. The industry’s gross value added stands at nearly EUR480 million, it contrib - utes EUR144 million to public budgets annually and employs over 6,000 people across 200-plus compa - nies. Relative to Western Europe, however, the sector remains modest in scale. Limited access to growth financing remains a structural weakness. A positive development for the future of Czech fin - tech is the CzechInvest Fintech Regulatory Sandbox, a government initiative for systematic financial innova - tion support, entering its operational phase. Digital assets The Czech National Bank (CNB) has received one of the highest volumes of crypto-asset service provider licence applications in the EU, confirming Czechia’s position as a regional leader in digital assets. Czechia has accumulated hands-on experience with digital assets through two landmark events. In what became known as the “Bitcoin Affair”, a convicted criminal voluntarily surrendered bitcoins, the proceeds of illicit activity, to the Czech state (Ministry of Justice), which subsequently moved to auction them off. When the story became public, it triggered significant legal and regulatory scrutiny, with legitimate new bitcoin- holders left uncertain about what they could lawfully do with the flagged assets. Adding to this, the CNB
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