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Crypto Exchanges& Regulation in Austria

Top exchanges in Austria by Coincub criteria
Article review author
Jonathan Lea
Austria head image

Crypto Country Rating: 7.4/10

Institutional acceptance
Active advocates of blockchain technology
Exchanges & Wallets availability
All leading services available
Government regulation
New legislation needed to accommodate crypto
Defi acceptance
DeFi still a widely debated subject
Financial services
Blockchain riding high with active stock exchange involvement
Registration licencing needed for echganges and personal ID for users.
Spending crypto
Low uptake of spending options
Banks activity in crypto
Banks looking to adopt certain blockchain advantages

Bitcoin and crypto trading in Austria

Austria is a ‘steady as she goes’ crypto-friendly country, content not to lead or innovate in the crypto sphere but let others make the running. That said, the establishment has a positive outlook towards crypto and the country registers a very high Google crypto search score for its population – obviously a nation of crypto voyeurs. Austria’s number of Bitcoin nodes is higher than average for a country of its size and it also has a high number of ATMs, which gives it its relatively high score in the Coincub crypto ranking.

On the way is a clearer tax strategy as the country means to adopt a similar treatment of crypto trading as that applied to more mainstream asset trading such as shares. Taxing crypto is not a negative in the Coincub crypto ranking, on the contrary, any moves to make crypto trading clearer, safer – and, yes, even more taxable – creates confidence in the crypto economy. A more cohesive tax policy adds credibility to crypto activity, rather than leaving it outside the system.

On the other hand, tax is still tax, and this being the case, Austria will slap a 27.5% capital gains tax on cryptocurrencies such as Bitcoin and Ethereum, a move scheduled to start about the time of writing this assessment. The move is not in isolation, but rather part of a wider tax overhaul and ahead of the other EU countries. Rather than saying the tax is a revenue generator, the Finance Ministry reports that it is simply a way of bringing crypto trading into line with other investing – which seems to bear out our point about credibility in the previous paragraph.

The tax only applies when crypto is sold and complements an existing tax on tax on crypto held for under a year. There is also means of compensation against losses and leveling the crypto playing field in this way should offer investors similar protection and obligations as to trading in mainstream shares. Austria moves up slightly in our ranking guide thanks to its movement on clarification and steady acceptance of the need to accommodate crypto rather than leave it to others.


Law and crypto trading in Austria

CSurprisingly, there have been no specific cryptocurrency laws brought to bear, but that does not mean crypto is given free rein. Much depends on the definitions of cryptocurrencies. Crypto is not treated as a currency or as a financial instrument but as a commodity. The operation of crypto service providers comes within the licensing requirements of the Austrian Banking Act and several other Acts and EU prospectuses. The Austrian Financial Markets Authority (FMA) does urge caution to consumers (don’t they all?) but does not regulate or supervise crypto to any great extent, rather relying on the same regulatory framework to cover crypto services like those which apply to traditional products and services. Innovative business models involving crypto are subject to licensing requirements from a whole raft of regulatory bodies within the FinTech sector.

Paying tax on my crypto trading in the Austria

Cryptocurrencies such as bitcoin are not recognized as an official currency or financial instrument but with regard to income tax assessment, any resulting income from them is calculated at the applicable rate. As a private individual holding crypto, the income tax treatment depends on whether they are interest-bearing or not. If your cryptocurrency bears interest, as when it is lent to other individuals or companies that are trading cryptocurrency, then they will be assessed as ‘interest-bearing’ and taxed at a special rate of 27.5%. If there is no interest-bearing investment, the selling or exchange of crypto assets is deemed taxable as a speculative transaction if the period between acquisition and disposal is less than a year.

Tax relief, changing residency and gifting crypto coins Austria

For individuals holding cryptocurrencies – as non-business assets – any gains from converting your crypto into a fiat currency – or other cryptocurrencies – are tax-free but only if those gains are realized after a one-year speculation period. They are taxable if realized within a year, however, a tax-exempt amount of €440 per annum applies. The exchange of legal currency or tender for cryptocurrency or vice versa is exempt from VAT in line with EU directives on the subject.

Crypto mining regulations in Austria

Thinking of mining crypto? It’s a highly technical and expensive activity at the best of times, involving powerful computers – and lots of energy – but every time Bitcoin hits a record price, mining suddenly becomes fashionable. The costs in time and money are high and in Austria the activity of ‘creating crypto assets’ is viewed as a commercial activity that carries the corresponding tax implications. The creation of crypto assets is therefore not treated differently from the production of any other economic goods but having said that, bitcoin mining is not subject to VAT.

Planning your retirement and investing in cryptocurrency in Austria

Cryptocurrency is a big investment play among an increasing amount of the population. All leading investment banks are facilitating investments in crypto to their clients. That said, crypto is still viewed as volatile and unpredictable for many organizations offering long-term financial planning so it is likely that any investment plan would carry higher fees due to the higher risks involved.

Austria’s Financial services’ outlook on Bitcoin and crypto economy

Taking its lead from the government’s openness to FinTech, the potential for blockchain and its fields of application are being actively pursued. FinTech start-ups and financial institutions are using blockchain technology within decentralized finance applications. This includes crypto trading exchanges, mining, wallets, custody, payment services and through activities such as Initial Coin Offerings (ICOs). Blockchain is being explored for its potential within other applications too, as in the development of digital tokens for interbank or intercompany transactions. The Erste Group, a leading bank, and the infrastructure company, ASFINAG, created the first capital market issuance in Europe, some 20million euros, to take place using exclusively blockchain technology. The Vienna Stock Exchange was also the world’s third officially regulated market to enable the Bitcoin and Ethereum products (of a Swiss company) to be traded. All in all, Austria is a blockchain advocate.

Austria and DeFi: the latest developments

Blockchain is the technology that many governments are keen to promote, for fear of missing out on the advances being made and Austria is keen to keep ahead of the curve. With this in mind, Austria is proving to be something of a haven for providers of blockchain-based products and cryptocurrencies. The government’s early take-up in blockchain innovations has led to serious efforts to create the right frameworks for this technology to flourish. Currently, for example, great effort is being made within the public and private sectors to boost Austria’s business center credentials. The newly established Austrian Public Service Blockchain is operated by the Federal Computing Centre and the Vienna University of Economics and Business Administration- to name but a few. There is also a private blockchain infrastructure for companies currently operating with blockchain tech. The question of decentralized finance DeFi replacing the traditional financial system is a long way off – as is the case in nearly all countries.

Crypto security, transparency and compliance in Austria

Crypto services are subject to anti-money laundering (AML) requirements including the fifth EU Anti-Money Laundering Directive and apply to custodian wallet providers and providers of exchange services between virtual currencies and fiat currencies. These include the widely known and accepted Know Your Customer KYC checks and AML prevention systems. Despite appearing to have a light regulatory touch, there are plenty of compliance requirements for crypto service providers. However, when it comes to the security track record of an exchange or wallet, its levels of customer service, its fees and the overall services it offers, it’s best to do some serious homework and find the one that suits you. Service providers vary widely in their levels of operation.

Spend Bitcoin and cryptocurrency trading in Austria

Spending bitcoin in stores hasn’t really taken off in Austria, but you will find some leading outlets in Vienna. There are, however, plenty of services that provide the means to convert and spend your crypto on products and services, such as using gift cards. You can also spend in a vast number of outlets using payment service apps dedicated to cryptocurrency holders, in much the same way as credit and debit cards. One such leading crypto payment service, A1, sees this as an inevitable route towards a cashless society. Using these means opens up the whole gamut of goodies, especially in tech-friendly outlets.


New to crypto? Here’s our guide!

FAQ Image #1 01 Why Bitcoin? It seems like the buzz around Bitcoin just keeps growing. Bitcoin is a constantly evolving technology with a passionate community. What is it about the digital asset that makes it such a controversial topic and attractive investment?
FAQ Image #2 02 How to Get Started with Bitcoin It can be difficult to get past the technical jargon surrounding bitcoin (BTC) and other cryptocurrencies in order to figure out how you can buy and store them. Beginners can purchase Bitcoin, for example, on many exchanges using fiat currency like U.S. Dollar, Euro or British Pound.
FAQ Image #3 03 Blockchains 101 Blockchains are a type of database where data is stored in blocks that are chained together. As new data comes in, it is entered into a block, which is then chained to the previous block. The Bitcoin blockchain serves as a ledger that records every Bitcoin transaction in history.
FAQ Image #4 04 Bitcoin in the Real World Ok - you’ve found an exchange, bought your Bitcoin, and stored it safely. What’s next? By now you can buy just about anything with Bitcoin if you try hard enough, from Amazon gift cards to an old master painting. You can also convert your BTC to fiat with ATMs, an exchange, and more.

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