Today, in order to reduce risks, many governments are now working on ways to convert currency to digital. Cryptocurrencies will soon circulate in the same way as cash since they are secured by the Central Bank and related to the local currency.
The reasons for providing CBDCs vary from nation to nation, according to studies done by Bloomberg Economics. The area, technological and intellectual prowess and economic situation are all taken into consideration. At the same time, every nation works tirelessly to establish the dominance of its cryptocurrency on the global financial scene.
Cryptocurrency in the European Union
Press releases from the major financial authority of the European Union frequently include warnings that cryptocurrencies are highly volatile, openly speculative instruments. When using this tool, investors are urged to use extreme caution. The Central Bank also accepts that it is hard to deny the existence of cryptocurrencies given the market’s fast development and significant influence on the economy.
Financial experts from several nations agree that a simple, efficient taxation tool is necessary. All participants of virtual marketplaces must be positively recognized in order to do this.
Bulgaria
As of now, the nation’s government views cryptocurrencies as hybrid financial instruments that should maximize revenue for the budget. Law enforcement groups maintain a close eye on the situation at all times, continuously observing the market and vigorously fighting any efforts to defraud or use virtual money to fund criminal or terrorist organizations.
Denmark
Bitcoin and other cryptocurrencies are not regarded as “normal” currencies by the Danish Financial Supervisory Authority, hence they are not governed by the agency. Cryptocurrency operations are not constrained.
Finland
In this nation, cryptocurrencies of all varieties have the status of financial instruments used to conduct all forms of payment. Regarding the taxation of digital assets, the Finnish Tax Service has published a specific directive. All bitcoin transactions are subject to two wealth and capital gains taxes. Mining farms are charged for their labor.
France
Since a press release was officially released in July 2014 stating that the French authorities were conscious of the significance and prospects of the cryptocurrency industry, opportunities and advantages which can give operations with them, it is odd that the legal status of digital currencies in France has not yet been defined.
Additionally, it was said that shortly, draft regulation papers will be released with the intention of addressing the taxation of cryptocurrencies and cryptocurrency-related activities in general. This has not occurred as of yet.
Germany
Transactions involving cryptocurrencies are seen by the Federal Financial Supervision Authority as units of account, which subject them to the standard tax laws for capital gains or private money. However, only individuals can currently use digital currency for cross-party payments. The bitcoin industry is evolving so quickly that there is just not enough time for the law to update its laws.
Lithuania
Legal cryptocurrency transactions are possible in Lithuania. The government has authorized the conduct and control of crypto activities in writing (FCIS).
Lithuania cryptocurrency regulation provides a welcoming and controlled legal environment for enterprises with fully transparent regulations, offering a crypto exchange and wallet operations in place since 2020.
For using virtual money, there is 2 different licensing types available:
- Lithuania crypto exchange license. Such a license allows to exchange of digital currencies for FIAT or inversely, as well one crypto for another, for a charge.
- License for crypto wallet and custodial services. A business with a Lithuania crypto license may operate a user wallet, which involves producing and maintaining client key encryption.
Luxembourg
Cryptos are treated similarly to other foreign currency assets by the nation’s banking authorities. The use of cryptocurrencies for any transactions, trades, or mutual settlements is permitted by the government for both natural persons and legal companies. Exchanges and exchangers are subject to governmental regulation through the issuance of specialized licenses.
Poland
The country’s Ministry of Finance stated in a 2013 communiqué that while cryptocurrency transactions are legal, they are not regarded as genuine money. At the same time, it is legal for businesses to buy and sell bitcoins and run mining farms for free. Only after passing a specific registration is such action permitted.
Slovakia
According to the declaration of the local Central Bank, bitcoins do not come under regulation since they lack the characteristics of actual money. Therefore, any transactions involving virtual currency are permitted.
Slovenia
Digital currencies are not recognized as currency or financial assets by the Ministry of Finance. Taxation applies to the operations of mining operations and cryptocurrency exchanges.
Spain
Cryptocurrencies have been accepted as legal electronic payment methods in the nation from the beginning of 2014. Government legislation mandating miners to register for crypto license and mandatory taxes payment was approved in 2016. The emergence of a virtual financial market necessitates ongoing modifications to the legal system.
Sweden
Payments made using cryptocurrency are now permitted, according to the nation’s financial regulatory body. Exchangers and exchanges must register and apply for a license while strictly maintaining the confidentiality of the depositors’ personal information. AML/CFT regulations must be followed by businesses. A proposal to virtualize the crown as a state unit of account is now under active development.
What about Great Britain?
The market for virtual currencies is not in any way governed by local legislation because the state does not view them as full-fledged financial instruments. Private money is how cryptocurrency is seen. The tax service evaluates each transaction independently based on the kind of transaction.
In addition, the Central Bank is going to pass through parliament legislative acts that consider blockchain as an illegal way to launder money, finance terrorism, and encourage corruption, in order to oblige all market players to disclose their personal data.
The British Treasury is developing its own cryptocurrency that is connected to the pound sterling at the same time. Therefore, the regulator will address the extreme volatility of the virtual currency.
