As a crypto enthusiast, you may surely want to know about the legal status of cryptocurrency in all countries. Considering the demand for this kind of information, ‘The Blockchainist’ is starting a new blog series that will contain detailed information on cryptocurrency laws and regulations in different countries of each continent. This blog, ‘Cryptocurrency Laws and Regulations in European Countries,’ is the first blog in this series.
It unravels all the relevant and necessary laws in all European countries, which one should know about. So, without further ado, let’s jump straight into this.
Before delving into the cryptocurrency laws and regulations of each nation, let’s first take a look at some important decisions made by the European Union related to this.
European Union at Forefront: Timeline of Important Decisions Taken by the Commission
March 8, 2018: The Implementation of FinTech Action Plans
The FinTech Action Plan was one of the very first efforts made by the European Union (EU) Commission to build a revolutionized financial sector. The main aim behind this action plan was to prepare Europe enough to thrive in the technologically advanced world. Under this action plan, the EU Commission took 19 steps to fulfill its motives.
June 29, 2023: An Enforcement of MiCAR Regulations
On June 29, 2023, the European Union adopted MiCAR (Markets in Crypto-Assets Regulation). This new law aims to provide a consistent framework for regulating crypto-assets and related services. This groundbreaking law will officially come into application on December 30, 2023. However, Titles III and IV will be implemented from June 30, 2024. MiCAR is expected to significantly impact Europe’s financial sector.
June 2024: A New Beginning in the Financial Sector of the EU
European Union officially adopted four delegated acts, which place strict regulations on fiat-backed stablecoins. According to the MiCAR framework, the stablecoin issuers are required to hold mandatory licenses as EMI (Electronic Money Institutions). Complying with MiCA regulations, major cryptocurrency exchanges are making various efforts. Uphold (one of the renowned cryptocurrency exchanges) even announced the delisting of stablecoin for European users. Binance and Bitcoin have also started categorizing their tokens.
That’s enough history! Now, let’s move on to the main topic of our blog post: cryptocurrency laws and regulations in all European Countries.
Cryptocurrency Laws and Regulations in All European Countries
1. Baltic Nations
Latvia
According to ‘The Bank of Latvia’ and ‘The State Revenue Service,’
Cryptocurrency is a contractual, not Statutory, digital currency
This means cryptocurrency is based on or governed by a contract rather than laws or statutes.
This also implies (in straight words) ‘Cryptocurrency is not legal tender in Baltics.’ However, (Thanks to the amendment of anti-money laundering legislation in 2017), Latvia enjoys a little freedom in functioning virtual currency service providers.
Estonia
In the Baltic region, Estonia is the most cryptocurrency-friendly state. Moreover, cryptocurrency exchanges are legal here. Do you know an interesting, fun fact: Estonia is even planning to debut its digital currency (rumored to be known as Estcoin)
Lithuania
Cryptocurrency is legal in Lithuania and you can transfer, store, trade, or operate digital tokens there. Moreover, Lithuania is one of the most pro-crypto nations in Europe. Lithuania has even organized cryptocurrency laws and regulations.
2. Belgium
Let’s tell you a little fun fact: Christophe De Beukelaer (an official Brussels member of parliament) was the first European politician to convert his salary to cryptocurrency.
From here, you might have got an idea about Belgium having pro-crypto stances.
Well, to some extent, it is true. However, cryptocurrencies aren’t regulated under any Belgian law. In addition, cryptocurrency exchanges don’t even require any license to function.
3. Croatia
Croatia is neither anti-crypto nor pro-crypto. There aren’t any regulatory bodies for the control of crypto projects, but that doesn’t mean cryptocurrency is illegal here. The National Bank of Croatia has also argued the same.
4. Cyprus
Recently, the Central Bank of Cyprus acknowledged Bitcoin but also mentioned its risks.
The bottom line is that Cyprus falls under the pro-crypto category, but it needs strict regulations to regulate its functioning.
However, since 2020, the nation has been making several efforts to regulate crypto assets.
5. Czech Republic
From the early days, the Czech Republic has shown a diplomatic viewpoint on cryptocurrency. CNB is a national regulatory authority that oversees the digital token sector in the Czech Republic.
6. Denmark
Even politically, Denmark has always been vocal about the issue of money laundering. This is why the nation has adopted strict cryptocurrency laws and regulations. If an individual or organization is found to be involved in any money laundering case, a four-year prison sentence is inevitable.
7. Finland
Finland has a relatively crypto-friendly stance.
Finanssivalvonta is Finland’s supervisory authority for the Finland financial markets. The authority has highlighted the various risks of investing in cryptocurrencies and has made strict rules regarding the eligibility of cryptocurrency platforms that function there.
Cryptocurrencies are recognized as financial assets, and crypto exchanges must comply with these FIN-FSA regulations.
8. France
France is one of the few countries that has been pro-crypto since the early days of cryptocurrencies. Tracfin, the French financial intelligence unit, mentioned cryptocurrency in its 2011 annual report.
In 2016, Article 2 of Ordinance No. 2016-1635 was amended to include the list of cryptocurrencies trading platforms and brokers.
ACPT was the first French crypto regulatory body, which came into existence in January 2014. However, it was in 2016 that France officially started working on a legal cryptocurrency framework. Eventually, this legal framework was adopted on May 22, 2019.
France has an interesting history related to the functioning of cryptocurrencies. We’ll surely write a dedicated blog post on this topic.
But the bottom line is:
France recognizes cryptocurrencies as fungible assets and subjects them to taxation. Moreover, the nation aims to foster innovation in blockchain while ensuring consumer protection.
9. Greece
In 2015, Greece turned her head to online trading platforms such as Bitcoin due to the debt crisis. However, over the years, the nation has faced several crypto scams and money-laundering issues. Ultimately, The Bank of Greece has to adopt EBA’s warnings in an effort to control virtual currencies. As of now, Greece has been exploring blockchain applications in various sectors, including public administration and supply chain management.
That’s why Greece joined the EBP (European Blockchain Partnership). This organization, established on April 10, 2018, by 22 European Countries, aims to establish a secure and transparent blockchain environment in Europe.
10. Germany
According to the new cryptocurrency law passed on July 1, 2021, Germans can legally invest in cryptocurrencies. However, Germany is very new to this. There isn’t any regulatory body for cryptocurrencies or any relevant laws on their functioning.
Though the German Federal Financial Supervisory Authority has taken the responsibility of regulating cryptocurrencies, there isn’t a strong regulatory body.
There is a long way ahead for Germany in the cryptocurrency sector. This is just a start!
But if we look at the trends, Germany has solid pro-crypto arguments.
To Be Continued………
We’ll resume this information in our next blog post. The topic of ‘Cryptocurrency Law and Regulations in European Countries’ is too broad. Thus, it needs a PART 2. In an upcoming blog post, we’ll discuss the cryptocurrency regulations in the following nations:
Iceland
Ireland
Italy
Luxembourg
Liechtenstein
Malta
Netherlands
Poland
Portugal
Spain
Sweden
Switzerland
United Kingdom
This blog post is compiled as the European financial sector is projected to witness significant changes next month. As a crypto enthusiast, you might need this information to make trading and investment decisions.
With this, we would like to wrap up this blog post. Stay tuned for PART 2 of this blog post.
