Government regulations factor in heavily in terms of the climate that crypto companies operate in. A survey that was conducted and recently published among executives from the industry indicates that the slow advance in that regard is a major concern. Half of the respondents that is 53% of chief executive officers, as told by venture capital firm digital currency group pointed out the regulatory environment as the main enemy in the industry. Other threats included the possibility of an economic downturn and cybersecurity risks.
A quarter of the questioned managers admitted that compliance was the greatest issue they faced last year, whereas a third of the respondents indicated that the lack of regulatory progress this year surprised all of them. Rules constricting the growth of cryptocurrencies are much more worry to the industry than hacking attempts, for instance.
Existing regulations in a number of countries are as such inadequate as they do not cover the specifics of crypto-related economic activities and in the event where new ones are introduced, they are more hostile. However, there exist a few notable exceptions, especially in Europe, in countries such as Switzerland, Estonia, Belarus, Malta and Gibraltar.
Authorities in these jurisdictions have taken the head start to create favourable regulatory outlines that are serving to attract even more crypto companies. The total of governments with positive attitudes towards the cryptocurrency Industries and digital assets is growing, and the crypto community has seen some promising developments over the last few months. This progresses include the adoption of new legislation that creates more business-friendly conditions for crypto companies to operating as well as presenting a favourable interpretation of taxes that can save investors’ money.
Lichtenstein, which is seen by many to be an integral part of the rapidly expanding Swiss Crypto Valley, has recently adopted a law that is geared towards the clarification of the regulatory environment for crypto businesses. The “token act,” which was unanimously approved by the country’s parliament turns the country into a secure location for service providers operating with digital coins and token-based Securities. The small alpine nation has hopes that it will, at one time, be a major European fintech hub.
Regulatory uncertainty can deter businesses and individual investors. However, a couple of clarifications issued by Portugal’s tax authority have placed the country as a crypto tax haven in Europe. In its recent and latest statement concerning the issue, the regulator indicates that transactions related to mining, the miners’ reward and its exchange to Fiat should be exempted from VAT. The agency has previously made announcements indicating that the cryptocurrencies can generate taxable income gains on their sale or appreciation received by private individuals and are not subject to taxation.
Ukraine which recently voted in a younger and more tech-savvy generation of politicians to power is also in the race to embrace cryptocurrencies. There exist a consensus between government institutions, business circles and civil society on the need to legalize decentralized digital assets and regulate related economic activities. A number of new bills that are geared to accomplish that agenda have been proposed and are as of current being worked on in order to be finalized. They are supposed to provide answers to the concerns of the legal status of cryptocurrencies and taxation thereof in the industry.