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Commissioner for Financial Stability, Financial Services and Capital Markets Union, Valdis Dombrovskis of the European Union (EU), is urging a broader regulatory regime upon cryptocurrencies, and is threatening an EU move especially if there appears to be no global consensus on how to address the decentralized currency phenomenon. 

Also read: Bitcoin Futures Regulator Allows Employees to Trade Crypto

EU Financial Commissioner Urges Global Crypto Regulation

Valdis Dombrovskis, Vice-President of the European Commission, warned, “[bitcoin] is a global phenomenon and it’s important there is an international follow-up at the global level. We do not exclude the possibility to move ahead (by regulating cryptocurrencies) at the EU level if we see, for example, risks emerging but no clear international response emerging.”

Mr. Dombrovskis’ remarks were delivered this week in Brussels at a an EU Commission meeting termed Roundtable on cryptocurrencies. The agency “aims to ensure investor protection, market integrity and financial stability while taking full advantage of the new technological developments,” according to its website.

Valdis Dombrovskis

Participants in the “Cryptocurrencies – Opportunities and Risks, exchanged views on how the EU institutions, supervisors and Member States should respond to the challenges posed by fast technological developments, and seize the opportunities they offer. So-called cryptocurrencies (virtual currencies) and their underlying blockchain technology are affecting many sectors of the economy, including finance,” the site explained.

The Commission plans to use the discussion at Brussels to inform broader policy as they head into the G20 meetings later in Argentina. “The discussion was organised around three themes: cryptocurrencies and their implications for financial markets, investor protection and market integrity in relation to cryptocurrencies as an emerging asset class, and the potential and challenges posed by initial coin offerings,” they detailed.

Clear, Frequent, and Across All Jurisdictions

For his part, Mr. Dombrovskis urged the roundtable to follow up on an existing Franco-German letter concerned with crypto regulation. “Crypto-asset markets are global, with worldwide transactions between investors, consumers and intermediaries,” he said. “On its own, Europe represents only a small share of global cryptocurrency trading, so we need to work together with our partners in the G20 and international standard-setters.”

After applauding “blockchain technology,” the Vice President outlined issues he felt were previously unaddressed: Cryptocurrencies “which are not currencies in the traditional sense, and whose value is not guaranteed, have become subject of considerable speculation. This exposes consumers and investors to substantial risk including the risk to lose their investment. This is why our third conclusion is that warnings about these risks to consumers and investors are important: these must be clear, frequent, and across all jurisdictions.”

For good measure, he was careful not to miss initial coin offerings (ICOs), which he termed an “opportunity” but ultimately “there are also problems that expose investors to substantial risk, such as the lack of transparency regarding the identity of the issuers and underlying business plans.”

Perhaps the most ominous of his remarks were saved for the very end, as he pounded home the point “crypto-assets present risks relating to money laundering and the financing of illicit activities. That is why the Commission proposed that virtual currency exchanges and wallet providers should be subject to the Anti-Money Laundering Directive. The co-legislators reached an agreement in December, and we invite Member States to prepare for a speedy transposition of this legislation. To sum up, the Commission will continue to monitor these markets together with other stakeholders, at EU and international level, including in the G20. We stand ready to take action based on an assessment of risks and opportunities,” he insisted.

What do you think of the EU’s proposals? Let us know in the comments section below.

Images courtesy of Pixabay, EU.

Not up to date on the news? Listen to This Week in Bitcoin, a podcast updated each Friday.

The post EU Losing Patience – Urges Global Crypto Regulation appeared first on Bitcoin News.

Germany is taking a lead within European Union established economies, deciding upon slow regulation when it comes to the world’s most popular cryptocurrency, bitcoin. It will not tax the digital asset as a form of payment, miner rewards escape the sting as well, and even some exchanges will receive exemptions.  

Also read: Bitcoin Futures Regulator Allows Employees to Trade Crypto

Germany Slows on Taxing bitcoin

Bundesministerium der Finanzen, Germany’s Federal Ministry of Finance, issued a four page document outlining its tax regime regarding bitcoin, VAT treatment of bitcoin and other so-called virtual currencies. Using a 2015 decision from the European Union Court of Justice on value added tax (VAT), the broader EU believes it can decide the fate of taxing bitcoin. Germany too is using it as a framework.

Though filled with legalisms, the document seems to imply bitcoin as legal tender when a means of payment, thus exempting it from a typical usage tax. Interpreting usage of bitcoin “free of VAT…[the] use of bitcoin is the use of conventional means of payment if it serves no purpose other than a pure means of payment serve,” the document defines. “The dedication of bitcoin to the mere remuneration payment is therefore not controllable. When paying with bitcoin, the fee is basically determined by the service provider the equivalent in the currency of the Member State in which the service takes place and to the time this performance is performed.”

When taking bitcoin from the virtual world and into euros, for example – government paper – then this would be still not be a taxable event, the document implies. This is due to the premise of bitcoin being legal tender. bitcoin purchases per se will be subject to VAT, as are all such transactions for businesses. Service fees paid to digital wallets are also subject to tax.

A Bullish Trend

However, after describing what constitutes mining, the document concludes “The services of the miners are non-taxable transactions. The so-called transaction fee, which the miners of other users of the system is paid on a voluntary basis and is not directly related with the achievements of the miners. Also, the reward in terms of receiving new bitcoin by the system itself is not to be considered as payment for the mines,” and therefore will not be taxed.

Under the rubric of “trading platforms,” the operator “of a trading platform its website as a technical marketplace to acquire or trade bitcoin to market participants” will not be tax exempt, as the document calls an exemption “out of the question”. The “operator of the platform, however, the purchase and sale of bitcoin as Intermediary in his own name, the tax exemption” is provided for so long as they do so in their “own name.”

Liberalization follows other recent bullish news from Germany regarding Bitwala launching “a new banking service with real debit cards. Its application with the Federal Financial Supervisory Authority of Germany (Bafin) is pending. Once approved, customers’ funds will be guaranteed up to €100,000. The move follows the suspension of the company’s prepaid Visa cards,” News.bitcoin.com reported.

What do you think of Germany’s moves? Let us know in the comments section below.

Images courtesy of Pixabay.

Not up to date on the news? Listen to This Week in Bitcoin, a podcast updated each Friday.

The post Germany Treads Lightly on Bitcoin Taxation appeared first on Bitcoin News.