Over the past few months, Spain has experienced major developments in the realm of cryptocurrency regulation and blockchain adoption. These developments could introduce major changes to the country’s ICO regulations, tax collection practices, and public services.
What follows are the details of the latest blockchain and crypto developments as of December 2018—and answers to the question of whether these events will help or hinder the crypto cause in Spain.
Proposed ICO Regulations
Local newspaper La Vanguardia reported on December 10 that Spain’s ruling party, Partido Popular, has introduced a proposal that intends to regulate initial coin offerings (or ICOs). The proposal is fairly permissive, and it essentially outlines a standard process for cryptocurrency creators who want to sell new coins.
However, the proposed regulations would also ensure the safety of those who invest in those new coins. ICOs have long been designated a risky investment: countless coins exist, and many new coins quickly lose their value and become defunct. Additionally, some ICOs are fraudulent or are exit scams.
This has led many countries to limit the creation of new coins and discourage investments in those coins. The United States and China have recently introduced harsh regulations on ICOs. However, Spain’s new proposal offers more hopeful prospects, and, if successful, will allow “anyone who wants to introduce a cryptocurrency” to do so.
The proposal also suggests tax cuts for blockchain companies, new blockchain education initiatives, and a national council that would examine cryptocurrency. These last developments are, however, not entirely guaranteed.
Whether the proposal will successfully promote crypto and blockchain development in Spain remains to be seen. Partido Popular has introduced similar proposals in the past. On June 30, CriptoNoticias reported that the party made a proposal that includes some of the elements that are found in the December proposal.
Increased Tax Monitoring
On November 19, Spanish newspaper El Pais reported that the Ministry of the Treasury has begun to monitor 15,000 cryptocurrency holders for taxation purposes. This initiative is partly intended to prevent tax evasion by investors who make capital gains from their crypto investments. However, it is also meant to stamp out money laundering and criminal activity.
The 15,000 investors who are being monitored were identified earlier this year during an investigation into 16 banks and 40 companies. These companies included crypto exchanges, payment processors, and Bitcoin ATM operators. Spain’s National Fraud Investigation Office demanded customer information from these companies, which will be used for tracking purposes.
Previously, on October 19, Spanish newspaper ABC reported that the country had introduced a draft law that would force investors to disclose their crypto holdings in their tax reports. This new initiative seems to be in the same vein as that draft law, and compliance from various crypto companies will make enforcement feasible.
Although cryptocurrency itself does not collect data from its users, many crypto-related services now implement KYC checks that identify their customers. As KYC compliance increases, crime and tax evasion may be reduced. However, widespread user identification also signifies a loss of privacy, which is one of the fundamental tenets of cryptocurrency.
An International Blockchain Declaration
Finally, Spain has signed an international declaration concerning blockchain adoption, according to a story published by the Financial Times on December 4. Reportedly, several nations in Southern Europe have signed a declaration that promotes Digital Ledger Technology. This document primarily recognizes the benefits that blockchain technology can offer to public services and government administration.
The declaration called blockchain technology a “game changer” and suggested that the blockchain could introduce major innovations in the areas of education, healthcare, customs, and a number of other domains. It also stressed that blockchain technology would improve privacy for citizens, increase government transparency, and provide more efficient administration.
Spain was one of seven states in the southern European Union to sign the declaration: France, Italy, Cyprus, Portugal, Malta, and Greece also participated. Malta was ultimately responsible for spearheading the initiative, but the collective effort will likely attract blockchain partnerships to the southern EU as a whole.
On the whole, Spain’s blockchain and crypto-related prospects are quite favorable. In fact, the country has already adopted the technology in many areas: a major port in Valencia is using the blockchain to manage shipments, and the Spanish telecommunications company Telefónica is planning to use the IBM Blockchain to manage data collection. The country has also hosted major blockchain events over the past year.
All of the above stories put Spain on the map when it comes to blockchain adoption, both in private industry and in the public sphere. Although impending cryptocurrency regulations and tax monitoring may introduce some restrictions, the efforts of government bodies and political parties will surely promote blockchain adoption in the country.
A guest post by Mike Dalton, Unhashed.com