Eastern Europe Block Is Not a Chain Anymore
As the popularity of cryptocurrencies grows, so the legislation of the crypto industry develops too. Some states have their vision concerning digital currencies and are actively working on their implementation and adoption, while others are contra, fearing for security and considering crypto to be a threat.
Eastern European countries closely watch the development of legislation in the world in order to understand the progress and follow the trends. They have their own ways to solve the problems caused by the cryptocurrencies.
Poland changes rhetorics while on the move
The Polish authorities presented a new cryptocurrency bill, which details the taxation of transactions with digital money. The document states that the new type of assets is a payment instrument — it can be stored, electronically transmitted and used in e-commerce activities.
The government of Poland does not plan to impose a tax on cryptocurrency transactions, but users will have to pay for the income gained from selling the property, services, and goods connected with digital money.
One should remember that previously the central bank of Poland spent more than $250 thousand for a campaign against the digital money. Also, the government planned to impose a tax on any transactions with these assets. It seems that the game players have decided to change the rhetoric somewhere on the sidelines.
Bitnewstoday.com intended to study the current situation regarding the crypto industry in other Eastern European countries, which don’t appear in the TOP news so often. So, what has been going on there recently?
This country is one of those EU member states which are waiting for a pan-European decision on cryptocurrencies. The government of Bulgaria has not succeeded in regulating the crypto industry yet.
Nevertheless, Bulgarian Financial Supervision Commission adopted the "Financial Technology Monitoring Strategy (Fintech) in the Non-Banking Financial Sector", that is published on the FSC website. The document contains basic definitions of terms, such as cryptocurrency assets, virtual currency, smart contract, blockchain technology, ICO and more.
The tempo of Bitcoin business development is rather slow in Bulgaria: there are several bitcoins ATMs installed in Sofia, and also some exchanges operating. Anyway, the founder and director of BitHope Foundation Vladislav DRAMALIEV was positive in one of his interviews: “I think, Bulgarian crypto society is quite large and educated. Mostly these people are miners, but there are also enthusiasts who believe that the world needs bitcoin”
In contrary, Richard SHIBI, the international blockchain consultant, who resides in Sofia currently, is not so optimistic at all: “Bulgaria is a small country, and the IT sector is not well developed yet. Yes, there are many foreign IT companies around here, but they come mostly for Customer Support & Call Centres. I have not heard about a major player who has moved their R&D to Bulgaria yet. This leads us to the fact that blockchain which is just a tiny bit of the overall IT sector is almost absent in Bulgaria. There have been some ICOs here, but they raised little money. Nowadays things change very fast, and there is a chance that one day Bulgaria could provide blockchain services to other European countries. We do have private academies who work very hard to teach the local resources about blockchain software development. This process will take a few years, but the thousand miles journey starts with just one step forward.”
The government of Slovenia seeks to strengthen the country's position in the field of blockchain tech as one of the leaders among the EU member states. This might be achieved by the tools already known: openness to new technologies, application of tax incentives, and increased transparency of operations in the field of digital assets.
Currently, Slovenia's legislation defines cryptocurrencies as virtual currencies. This means that they can not be either financial instruments or money under the legislation of Slovenia on payment services and systems.
Also, Slovenia expanded the law on combating money-laundering via cryptocurrencies to comply with international requirements for tax transparency. Currently, any crypto exchange or broker is recognized as a financial institution for the purposes of AML legislation. Thus, such companies must comply with the transparency requirements and procedures of KYC, which are applicable to financial institutions. The intentions of Slovenia are also represented with the Bitcoin City project, according to which Ljubljana, the capital of the state, is to become one of the most progressive cities in the world.
The Czech Republic is one of the few countries in Eastern Europe, where cryptocurrency operations are not restricted or limited. According to the position of the Central Bank, operations with digital money are not subject to licensing and additional taxation. At the same time, the owners of bitcoin-ATMs, operators of crypto exchanges and similar organizations that exchange cryptocurrency for fiat money, must conduct mandatory verification of their customers.
According to the Coinatmradar, the Czech Republic has more than 20 bitcoins-ATMs installed. Some restaurants and shops in Prague accept bitcoin as payment for goods and services. According to ekonom.cz, the Czech Republic had tens of thousands of bitcoins in circulation; today this amount can be multiplied by three. Due to the fact that the country is located in the heart of Europe, the country is a popular place for regular crypto conferences, which attract a huge number of enthusiasts from all over the continent.
On August 15, the Hungarian government announced its decision to regulate cryptos and blockchain. According to the Hungarian Portfolio.hu, a group of specialists was formed with the assistance of the Ministry of Finance, the Central Bank and country’s tax agency. The crypto industry will be thoroughly examined by the above-mentioned departments. An important signal for Hungarians can be the fact that crypto regulation is currently rather intransparent, and cryptos fall under a complex taxation system, which affects the development of this industry in Hungary, especially for private investors, as Deloitte reported in April 2018.
However, one shouldn’t count on it in advance. Despite the formation of the group, Finance Minister Michali VARGA continues to state that cryptos are neither money, nor a means of payment and the situation seems unlikely to change in the future. As for today, Hungary has apparently taken a passive position, monitoring successes or failures of other states.
Summer has also been a bit productive for Romanian crypto industry. In July, Business Review reported about the bill on digital money issuance, which strictly limits emissions, with a compulsory demand for crypto start-ups to have a minimum shared capital of 350 000 euros.
In the case of adoption, the Romanian National Bank (RNB) will become the only regulator of such financial products in the country. As for other issues, the situation remains the same: national cryptos are not recognized as a means of payment with no distinct position towards ICOs, too. Moreover, it is unclear whether the tokens issued during the ICO will fall under the requirements for digital money. Well, the first step is done, but Romanian regulators have to go through a thorny path and face a lot of problems.
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