On the fence: cryptocurrency regulation in Spain
When it comes to bitcoin regulation or any regulation concerning cryptocurrencies, Spain has continued to be somewhat lax. Due to the rise in securities fraud during the country’s 2008 recession, the rights of investors of any kind are now highly protected.
Besides the fact that cryptocurrencies in Spain cannot be treated as legal tender, as shown by Global Legal Insights, the only issue Spain’s government seems to have is the investors failing to report their profits earned through cryptocurrencies. In order to remedy the situation, the Spanish government has taken a few steps.
Regulation aimed at taxation
A program was launched in April last year, intended to investigate investors operating in the bitcoin market as well as anyone involved with cryptocurrencies in general. It includes a variety of institutions based in Spain linked to both blockchain and cryptocurrency. Since its inception, the program identified 15,000 taxpayers associated with digital currencies, who will now be required to report earnings.
It is a new step being taken by the Spanish government to ensure cryptocurrency owners are paying their taxes. Not surprisingly, there are many who aren’t very welcoming of the new investigation program. Cryptocurrency regulation ranking site Coin to Buy views it as an “invasive” law, which doesn’t mirror Spain’s view of cryptocurrency promotion.
Spanish minister of Finance, Maria Jesus Montero, was quoted by Madrid-based newspaper ABC saying,
“It is stated as mandatory that people and companies inform the tax agency about this operation,”
referring to cryptocurrency investors as a whole. Not only does this new regulation target investments conducted in the country, but abroad as well.
Problems for investors
A major issue with the taxation of cryptocurrencies in Spain has to do with a variety of factors. The first deals with the issue of inaccurate reporting. Cryptocurrency investors who do not properly track their investments are prone to report inaccurate gains or losses. The second is related to the act of cashing in on investments. If cryptocurrency values rise, that means profit for an investor, but only if they are able to sell their assets at that price. Will taxation be applied to those who remain in the market?
New beneficial proposals
On a much more positive note, Spain has remained fairly open in their stance toward cryptocurrencies. For example, a new proposal has been put forward by the Partido Popular, or the People’s Party (PP) of Spain, as reported by La Vanguardia. This proposal would implement tax incentives for companies developing blockchain technologies, as well as make the introduction of new cryptocurrencies much easier.
Like many other nations, Spain has begun to realize the importance of cryptocurrencies and blockchain for future use. Teodoro Garcia Egea, the PP secretary, announced that this new proposal would “provide security to the investors” of cryptocurrencies while ensuring “new cryptocurrencies can be introduced by anyone who wants to.”
Where does Spain fall?
In terms of cryptocurrency regulation on a global scale, Spain’s efforts can be considered moderate. Compared to Malta, which is world-renowned when it comes to cryptocurrencies and blockchain, Spain hasn’t implemented many proposals, whether they be positive or negative for the cryptocurrency community.
Perhaps 2018’s bearish market is to blame. Now that 2019 has arrived, it is expected that markets will increase in value. An increase to market value, as shown in 2017, brings with it an alarming number of new investors trying to make a quick buck. This led to an increase in fraud, theft, and multiple scams associated with Initial Coin Offerings (ICOs). In order to put themselves on the map for cryptocurrency, Spain will need to expand its regulatory efforts as well as create new incentives for cryptocurrency investors.
Although the introduction of new proposals promoting cryptocurrency usage has been developed, investors in Spain most likely feel threatened by the program instituted in 2018. Why invest in the bitcoin market, or any other markets, if the government deems the technology as shady?
Where will Spain be in 2019?
Experts predict 2019 to be a positive year for bitcoin and the entire market in general. Blockchain implementation is expected to accelerate, and bitcoin’s value is anticipated to rise, ultimately bringing all other cryptocurrencies up with it. Spain appears to be on the fence with regards to cryptocurrencies, but how long can they afford to stay there?
If the Spanish government truly wishes to become a leader in cryptocurrencies, they’ll need to take a firmer stance on the technology. Sure, regulations are lax, but taxation continues to be an issue. All leading world economies, including the US, UK, and UAE, have announced new regulations, which should aid in managing the influx of markets in the upcoming year. If Spain doesn’t do more, their claims of becoming a cryptocurrency leader will look like a joke.