So far, the whole world has not been able to agree on how this will apply to the world of cryptocurrencies. Now each country is developing its understanding of this industry and creating appropriate laws.
There is also no common position in the EU countries about cryptocurrencies. Let’s take a look at how regulation occurs in which country.
Basic Principles of Cryptocurrency Regulation
In the world today, there are several approaches how to regulating cryptocurrencies:
- Recognize existence, but without creating legal regulation;
- Equate with electronic money;
- Equate to the goods, things;
- Equate to a separate currency;
Let’s look at the strategies chosen by the EU countries.
In 2015, Germany stated that crypto could not be equated with either electronic or foreign currency but instead fits the definition of multilateral clearing operations.
In 2014, Bulgaria developed principles for the taxation of cryptocurrencies. Thus, income from operations using cryptocurrencies is equated to financial assets and taxed at 10%.
This country has recognized the existence of bitcoin and allowed its storage of it, but it is not considered legal tender.
Denmark has stated that cryptocurrencies do not fit any existing methods of regulating activities created in the country. As a result, people can use it and make money from it, but they don’t have to pay taxes.
In 2013, she developed a rule under which cryptocurrencies should be considered foreign currencies.
At the moment, Lithuania is one of the EU countries that has developed the most thoughtful rules for the functioning of the crypto industry. So, to operate an exchange or an electronic wallet, you must register a company and obtain an appropriate license.
NFT was equated to securities. When exchanging currency, you will not pay VAT, and when buying goods, paying for them with crypto assets, the rules that apply to fiat currencies remain.
It is worth noting that Binance received both licenses to operate in Lithuania back in 2020 and is now successfully operating in this market. In this country, obtaining such a permit has been dramatically simplified. An essential requirement is that the founder of the company and employees have no previous criminal records and a proven customer base.
Sweden has allowed the use of cryptocurrencies on its territory as a means of payment between individuals and/or legal entities. The only thing is that you cannot buy scrap metal or other processed products for cryptocurrency.
France equates cryptocurrencies to electronic assets. However, the government advises you to choose your partners very carefully because, in case of problems, you will not be able to defend yourself in court.
Norway has legally equated cryptocurrencies to goods and taxes them. However, the government opposes this industry, as it uses a considerable amount of electricity, which significantly degrades the environment.
Being a country that can witness the melting of glaciers, it tries to do everything possible to preserve the environment as much as possible.
Belgium, Ireland, Italy, Slovakia, Slovenia, Czech Republic
They recognized the existence of cryptocurrencies but did not create state regulations.
Currently, there are no countries in the EU that would ultimately prohibit the activity of cryptocurrencies. It is mainly because, in 2015, the European Court of Justice in Luxembourg ruled to recognize cryptocurrencies to make payments.
The governments of many countries are concerned that some crypto companies can conduct illegal activities, so they equate them with financial institutions and regularly monitor their activities.