When Finance Minister from the 28 member states of the EU met this weekend, one of the items on their agenda was cryptocurrencies, and whether the union needs a common regulatory framework for the emerging space. Despite reports by industry experts urging the EU to adopt common rules, ministers decided during the two day meeting they were in no rush on the matter.
Slow and Steady
In a decision that will soothe many crypto enthusiasts, EU officials told Fortune on September 8, 2018, that the union’s Finance Ministers are in no rush to regulate crypto currencies.
The space has grown explosively in the last several years, and countries the world over have begun to develop their own particular stances on crypto regulation. But the EU, it appears, is content to let member states decide for themselves how to regulate the space.
Marked Differences in Regulation
We are very much in the early days of regulation for crypto, and rules differ greatly between countries. In the US, even if your local coffee shop did accept crypto payment, technically speaking your ‘sale’ of Bitcoin in that exchange would be subject to capital gains tax.
In Germany, however, cryptocurrencies are considered the same as fiat currencies, and the only taxes you would incur would be normal VAT, which is of course already baked into the price you would pay if you paid with cash.
On the other hand, miners within the EU are technically supposed to be paying VAT on fees paid on transactions, something that… isn’t really happening. Due to the global nature of crypto, even where regulations exist, they are often very difficult to enforce.
It is because of these difficulties that many experts want common regulations for as many countries as possible, and ideally, globally. The European Union in many ways is an obvious target here, considering the union already has common regulations for many other aspects of the financial market.
This was also the advice presented by a think tank that prepared a report on the matter for the ministers this weekend. The meeting concluded, however, with a determination that crypto is not currently a threat to the financial system, and that while common regulations will likely be necessary in the future, more time is needed for the various EU bodies and nations to analyze the space, as well as the different regulatory models developing around the world.
Ultimately the EU is content to let crypto develop mostly in peace. For now, at least.