Just a little while ago, most European countries remained vaguely uncertain with regard to their stance on blockchain technology as a whole and crypto-currencies specifically.
The policies themselves and opinions varied wildly across the Old World: some touted e-money as the definitive way of the future and some wanted to outlaw any and all crypto trading. Most jurisdictions, however, are still undecided, which is something that highlights the ambiguous nature of the crypto sector. By extension, it also means that companies that seek to obtain a cryptocurrency license in Europe might still be in for a difficult time.
Legislators’ indecisiveness when it comes to cryptos is more than understandable. Under the current circumstances, the fiscal side of this issue might prove to be way too complex to tackle without readymade solutions. Then again, they shouldn’t really waste any more time because the collective interest in crypto seems to be reaching a fever pitch.
Regulations and Licensing Across the EU: Overview
Main Regulating Body (or Bodies):
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The European Securities and Markets Authority (ESMA)
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The European Banking Authority (EBA)
Most European countries stick to a more traditionalist approach in regards to cryptos. At the time of writing, there is no universally applied classification of digital currency available throughout the continent, so, for instance, each country has to create a separate set of rules for obtaining a cryptocurrency license in Europe.
Below, we are going to discuss a few country-specific cases to give you some information on what to expect when applying for licenses or otherwise ingratiating yourself to this promising economic sector.
Germany
Crypto Status: Legal
Main Regulating Body (or Bodies): The Federal Financial Supervisory Authority / Bundesanstalt f?Finanzdienstleistungsaufsicht
In terms of acceptance and application of digital assets, Germany is considered to be one of the most progressive European countries. There is a special set of regulations pertaining to ICOs, there is tax-free trading, and several other perks.
Luxembourg
Crypto Status: Legal
Main Regulating Body (or Bodies): Commission de Surveillance du Secteur Financier (CSSF)
Looking back, this country was always at the forefront of issuing crypto license in Europe. In order to become accredited and start providing financial services, one must gain CSSF’s full approval. In Q1 2019, the main regulator had adopted a law that equates cryptos with fiat money. One more thing worth noting: there are EXTREMELY supportive taxation and trading policies put in place for companies that provide financial services.
France
Crypto Status: Legal
Main Regulating Body (or Bodies):
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The French Prudential Supervision and Resolution Authority / Autorit?e contr?e prudentiel et de resolution
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The Financial Markets Authority / Autorit?es march? financiers
In France, ALL earnings from crypto trading become subject to tax. Additionally, all crypto-currency savings are also taken into account when determining the equity tax. Many established businesses that seek to obtain blockchain license in Europe choose France not because of its taxation policies, but because of the fact that they are eventually treated with higher priority than most competitors.
Estonia
Crypto Status: Legal
Main Regulating Body (or Bodies): The Estonian Financial Intelligence Unit
This country is one of Europe’s frontrunners in the field of digital currency and crypto business support. The Estonian way of dealing with cryptos and crypto-centric projects is very straightforward: there is a strict regulatory model that facilitates the growth of transparent projects. Following a few adjustments that occurred in the summer of 2020, the rules for applying for a blockchain license in Europe have tightened up.
One more crucial component of the Estonian approach: in order to be licensed, a foreign company has to open a new branch operating out of Estonia.
Future Cryptocurrency Regulations Across the Continent
We expect more countries to follow Estonia’s suit and come up with stricter regulations and policies. A recent draft published by the European Central Bank alluded to several rising concerns and the Bank’s willingness to launch its own crypto. Also, there is a very evident push for the adoption of a unified Anti Money Laundering / Counter Terrorist Financing guidebook across Europe.
What does all of the above mean for companies and individual investors looking to either branch out or continue to do business within the world of digital assets? Since the legislators continue piling on the pressure with no real end in sight, the answer is simple ? a modern, forward-thinking business has to seek professional help.
Best Way to Deal with the Evolving Regulatory Policies
Businesses obtaining crypto license in Europe are now expected to have robust Anti Money Laundering processes in place to confirm that there’s no illicit activity occurring under the guise of crypto trading. Solutions offered by companies specializing in blockchain legal and crypto services ensure that the firms comply with the ever-changing regulatory policies across different jurisdictions. Moreover, such companies help protect reputations, manage risks, and avoid any and all threats.
