The EU is preparing for a fresh round of talks about cryptocurrency regulations, following an EU parliament report that warned the EU not to ignore cryptos. The report stated that cryptos are inherently safe, fast, and transparent, leading many to believe that cryptos could be harnessed to benefit Europe. A handful of European countries have already gone ahead and introduced crypto-friendly laws, however some countries are still waiting for the official go-ahead from the EU. Finance ministers still fear cryptocurrencies due to the perceived lack of transparency, as well as their uses in money laundering and tax evasion. However, once certain measures are put in place – such as stringent regulations – these worries will quickly melt away.
Crypto Tax Legislation Starting to Appear
Poland took a step towards in the crypto world last week by introducing clear tax regulations on crypto activities. Poland is one of the first countries in Europe to place such rules and regulations on the taxation of cryptocurrencies, and these new regulations could be used as a beta test for the EU. If the tax regulations in Poland are well received and work well, there is a good chance the EU could make a few small tweaks and then simply cut and paste these regulations into EU law. This would mean all EU nations have to implement the same laws within a given time period.
Malta Leading the Way
Malta – the tenth smallest country in the world – has successfully created and implemented crypto-friendly laws. These aim to make life easier for blockchain and crypto firms as well as keeping investors safe. If the EU was to take a deeper look into the new laws Malta has put into place – or at least is in the process of putting into place – it could learn a thing or two about blockchain technology and cryptocurrencies.
Potential ICO Regulations
The EU has recently implemented a handful of new crowdfunding laws, and some of these will affect the ICO industry. With proper regulation and key investor information being disclosed – much like during an IPO – investors into ICOs can rest easy knowing that the ICO is genuine. There have been a number of ICO scams over the years, with this hurting investor confidence as well as lawmaker’s opinions of the industry.
KYC and AML Checks
If all ports of entries into the crypto world are covered by sufficient KYC and AML checks, then lawmakers can stop worrying about money laundering and tax evasion. In fact, cryptocurrencies – coupled with strong KYC and AML checks – make it very hard to evade taxes and launder money. All funds are totally traceable – unlike fiat cash – and for this reason are inherently very difficult to launder.
The talks are set to be held in the next few months, so if they go well we could see the EU rolling out blanket regulations throughout its member states. It would then become the largest economic area to be crypto-friendly and it could set the precedent for other countries to follow suit.