Opponents and supporters of crypto-currencies: Europe and Russia

Regulation of digital assets

Most countries in the region have not yet taken a decisive action on cryptocurrency regulation:

Crypto regulation in Europe

Belarus

On March 28th Belarus enacted legislation on digital economy. The law allows storing and trading of digital assets, as well as giving them as a gift or inheritance. It also creates legal space for ICOs and cryptocurrency-fiat exchange.

Operations with tokens by individuals are not regarded as a form of entrepreneurship, which means that profits are not taxable. Cryptocurrenc profits generated by companies are exempt from taxation until 2023.

There is a trick, however: operations with cryptocurrencies have to be carried out through Belarus High Technologies Park, the country's attempt at creating Silicon Valley.

Malta

In april 2017 Malta declared its intention to become one of the first countries in the world to use blockchain in government systems. The country's financial ministry was tasked with formulating a national strategy on embracing the technology.

Joseph Muscat, prime minister of Malta:

“This is not just about Bitcoin, and I also look forward to seeing blockchain technology implemented in the Lands Registry and the national health registries. Malta can be a global trail-blazer in this regard.

I understand that regulators are wary of this technology but the fact is that it’s coming. We must be on the frontline in embracing this crucial innovation, and we cannot just wait for others to take action and copy them. We must be the ones that others copy.”

To create its own legislation, Malta's authorities invited market participants. From October 23rd to November 17th last year, Malta Financial Services Authority (MFSA) was collecting feedback on collective cryptocurrency investments schemes and later published it.

In February 2018 Malta announced plans to create a special agency to oversee companies dealing with cryptocurrencies — Malta Digital Innovation Authority. The regulator will give certificates to blockchain platforms and verify cryptocurrency transactions. This measure is supposed to "bring calm, legal confidence and trust" to the market.

Apart from the agency, Malta is about to create legal frameworks for ICO and cryptocurrency market participants.

Switzerland

In 2015 Swiss Federal Tax Administration (ESTV) declared that cryptocurrency operations are not subject to value-added tax. In that sense, cryptocurrency in Switzerland is analogous to any foreign currency.

Since May 2016 Switzerland's Canton of Zug accepts bitcoins for communal and other payments. Since January 2018 taxes in the Chiasso municipality can be paid with bitcoin.

On 16th of February this year, Swiss Financial Market Supervisory Authority (FINMA) published official ICO guidelines. The document splits tokens into three classes — asset, utility, and payment.

Romeo Lacher, head of the Swiss stock exchange, argues for the creation of a national cryptocurrency:

“E-franc will stimulate the Swiss economy, and will offer a more sophisticated payment services compared to those we have today. There will be many problems with its development, but we are commited to any initiatives in this direction.”

National Bank of Switzerland, however, declared that it sees no need in the E-franc.

Germany

In December 2017 Carl-Ludwig Thiele, member of the Board of the Bundesbank, announced that there will be no official European cryptocurrency:

“A rapid increase in value carries a risk of rapid losses, while the blockchain technology is expensive and unfit for payments. Introducing cryptocurrencies into the money market is not on the central bank's agenda.”

Meanwhile, in February 2018 German authorities acknowledged cryptocurrencies as a legal payment tender when it came to taxing them. Paying for goods using crypto will be subject to the value-added tax, instead of the capital outflow tax (the latter approach is used by the US). Mining and crypto-fiat trading will not be taxed.

United Kingdom

In February 2018 British authorities announced that they were researching the impact of bitcoin and other digital currencies on the financial system, to get a better understanding on how to regulate them.

Back in 2016 Bank of England declared it would create a national cryptocurrency RSCoin. In late 2017 The Telegraph reported that the final decision could be made within a year, and that the currency itself will be tied to the pound.

Russia

Russian authorities issued conflicting statements on cryptocurrencies. Nevertheless, a national regulation was introduced in the parliament on the 20th of March. The document's key proposals include:

  • Cryptocurrencies and tokens are considered digital financial assets and are treated as property.
  • Anybody engaged in cryptocurrency mining is considered an entrepreneur, if the electricity consumption limits are exceeded for three months in a row.
  • Exchanging tokens for rubles or foreign currency is allowed. Every other type of deals is under Central Bank's supervision.
  • Smart-contracts is an electronic form of a contract, which automatically executes on its conditions.

Also published on Medium.