Per a report from local news media Ara, Spain will tighten its approach to crypto and digital assets. The European country repeatedly has one of the largest populations of crypto investors in the region and will seek to implement new regulations to, as per usual, “protect them”.
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The report claims that the Spanish Ministry of Finance is currently working on a decree to change the General Tax Law and Personal Income Tax Regulations. These changes are intended to come into effect as of December 31st, 2022.
In that sense, Spanish citizens will be forced to report their crypto holdings, how have they invested in the nascent asset class, and if they are holding them locally or abroad. The Spanish Minister of Finance María Jesús Montero said the following to a national news channel, TVE:
It is a new currency we should be able to regulate so that there is no kind of fraud or any undesirable effect on the economy.
The main objective is to get more information from crypto investors and exchanges on holdings. The change in regulations contemplates that these entities and individuals will need to file an annual report on this issue for digital assets held “Inside and outside” Spain.
This report will force individuals to disclose what cryptocurrencies they are holdings, how much money they have invested, how much of the digital assets they have purchased through the year, and their valuation in Euros.
Due to price fluctuations, people will need to provide the last price of their cryptocurrencies as marked by their exchanges or use an estimate of the last price before reporting. There are some ambiguities with this proposal that should be cleared out before its implementation.
The report quotes a representative from the Bank of International Settlements (BIS) on the alleged danger of crypto investment, its impact on the economy, and why digital assets are “not stable money”:
as shown by the recent market turbulence and price collapse suffered by some of the main currencies
Probably, the most dangerous change in regulation is the one that will force people to submit a detailed report on their crypto operations. If the changes are approved, Spanish individuals will have to tell their government details about their transactions, their type of transaction (swap, trading, and others), when did they conducted one, and if they sent funds to a different wallet.
This could jeopardize the users’ privacy and provide the government with a lot of information on its citizens and their financial operations. The main regulator and the Spanish treasury claim that people investing in the nascent asset class (12% of their population as mentioned) lack “financial culture” and are “expose” to scams.
Furthermore, the new regulations could prevent companies from entering into crypto promotion deals. This could affect football clubs and other entities with an agreement to advertise exchanges and could force these entities to take their money out of Spain and move it to a friendlier country.
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