Austria can become the first European nation to treat cryptocurrencies like stocks as they set out to tax digital assets. Austrians might be looking at a 28% capital gains tax on their trades.
The Austrian Ministry of Finance has set out to level the playing field between stocks and cryptocurrencies. This movement is said to reduce the mistrust and prejudice towards digital currencies as they look to adopt the technology.
This new tax will start in March 2022 and will be the first of its kind in Europe. Many other countries have looked to regulate and tax cryptocurrencies from different angles but no one has treated them directly as stocks.
This means residents of Austria will pay taxes when they sell digital assets, however, they will not have to pay taxes when they purchase or hold digital currencies.
Other countries in Europe have talked about imposing regulations on cryptocurrencies but at the moment, most look to just let the technology grow.
One of the main issues that arise is the usage of stablecoins and how they can impact traditional fiat currencies. The Bank of England was also reported pushing for more regulation as the industry continues to grow.
Recently, the total market capitalization of cryptocurrency reached $3tn. This is the largest the sector has ever been and the market still continues to grow. Bitcoin and Ethereum continue to hold dominance over the market but many alternate tokens like meme coins and other blockchains have grown in popularity over the last year.
Austria choosing to treat cryptocurrencies like stocks is a bullish move for the industry. Its push to eliminate prejudice shows its understanding of what this technology can do for the country, and for various industries.
This is the opposite step from countries like China who have outright banned cryptocurrencies completely. This could be the beginning of many more countries adopting a similar method of taxation. There are very few countries left that are tax-free for cryptocurrencies.
The question to think about is: How do you feel about this regulation and if you want this to happen in your country?