Bitcoin and crypto trading in Greece
In a country with as many financial upheavals as Greece has had (who remembers the whole Grexit Saga) it’s no surprise that Greeks have shown a healthy appetite for cryptocurrency. The number of Bitcoin ATMs is high, as are the number of blockchain organizations, but the country is underserved by the virtual asset services provider (VASP) community. However, the recent introduction of a digital wallet provider and cryptocurrency exchange registry by the Hellenic Capital Markets Commission (HCMC) will help to improve Greece’s crypto-economy moving forward. There is no specific tax strategy for crypto and, as we have seen in similar environments, clearer tax guidance can actually promote the crypto economy rather than hinder it. Naturally, as an EU Member State, Greece will follow any EU initiatives, including the EU Commission’s proposals for a new EU law on crypto assets.
Number of ATMs – 66
Spend Bitcoin and cryptocurrency trading in Greece
A significant number of Greeks as with other European cryptoeconomies, exchange fiat currency with cryptocurrencies through overseas cryptocurrency exchanges and through the growing number of cryptocurrency ATMs. The growing use of cryptocurrencies is expected to rise as Greece becomes more financially stable and more blockchain related services are allowed – and feel confident enough- to enter the economy.
Law and crypto trading in Greece
Despite, or probably because of all its well-publicised financial woes over the last ten years, a high percentage of the Greek population turned to buying and holding cryptocurrencies using overseas exchanges. Crypto is perfectly legal. In response to its financial indebtedness (remember the whole Grexit saga before Brexit?) where authorities prohibited currency transfers to other countries to restrict cash leaving the country, Bitcoin became one popular route to make such transfers. Fundamentally, there is no definition as to the type and categories of digital assets and the legal nature of digital assets is likely to be assessed on a case-by-case basis, according to their specific characteristics. If that sounds a little confusing – it’s because it is.
Paying tax on my crypto trading in the Greece
Greece has no specific tax regime for cryptocurrency and no clear guidance on the matter of taxation on it. As with a number of mid-seized economies, Greece only taxes the gains you make on your crypto when you turn it or exchange it into a flat currency (traditional central bank issued currency, such as Euros or dollars). Once your cryptocurrency gain is materialized it is then income taxable at a rate of 22%. Holding it in a wallet incurs no tax.
Tax relief, changing residency and gifting crypto coins Greece
A while back Greece’s Independent Public Revenues Authority (IPRA) proposed that taxation of cryptocurrency income as income from portfolio investments. Therefore, any capital gains from the disposal of cryptocurrencies would be taxed for a non-professional individual at 15%, plus a ‘solidarity contribution’ which rises from 2.2% to 10% (that’s two taxes, by the way), applicable to annual income exceeding EUR12k Following on from the EU position which states ‘the sale of non-traditional currencies falls under the same VAT exemption as transactions relating to traditional currencies’, your crypto gains are exempt from VAT.
Crypto mining regulations in Greece
Mining crypto is a highly technical and expensive activity at the best of times, involving powerful computers – and lots of energy, especially in Greece. Due to the sky-high cost of electricity in Greece, mining is prohibitively expensive – at least within the country. There is no formal guidance on the taxation of mining income. But, depending on the specific circumstances, the mining gain, once exchanged into flat currency, is taxable after costs deductions at 22%. If the price of crypto makes mining more profitable and more popular – rates and laws could change.
Planning your retirement and investing in cryptocurrency in Greece
Greece has yet to reap the benefits of a cryptoeconomy, despite Bitcoin’s popularity with a large percentage of the population. Greece is a nation with a long tradition of preferring physical cash and assets to investments per se, so long-term investment planning with crypto is going to need far clearer regulation and guidance from the authorities before it become a mainstream investment choice. As yet, there are no special regulations relating to investment funds or collective investment schemes that invest in digital assets, but any that offer it are likely to want correspondingly higher fees. For the record, alternative investment fund managers (AIFMDs) are required to comply with existing conduct of business rules covering risk management, conflicts of interest and transparency obligations etc.
Greece’s Financial services’ outlook on Bitcoin and crypto economy
The Greek financial community has had enough well-publicised concerns over the past decade without being able to play a leading part in the cryptoeconomy of its own country. As a result most blockchain crypto activity has been led by a population willing to use overseas exchanges to transfer funds and hold bitcoin. However, with more EU proposals for digital assets to impact Greece in future, the use of cryptocurrencies and other digital assets is expected to expand over the coming months. This will enable banks and financial services to offer more innovative services
Greece and DeFi: the latest developments
While the Greek government is open to blockchain in the public domain, it has had enough conventional challenges to think about without the addition of new ways of adapting its technology and there have not been any notable initiatives in the area. There is something called the Hellenic Blockchain Hub made up of businessmen and public officials which aims to provide a basis for blockchain progression and education across the country. Various organisations and councils in the private and public sector support this. Clearer regulatory certainty will definitely accelerate the number of organizations interested in providing blockchain services and innovations. The regulation of decentralised financial (DeFi) platforms that match borrowers and lenders of digital assets is assessed on the legal categorisation of the assets being lent and the specific set-up of the platform. Digital assets exchanged over a DeFi platform do qualify as financial instruments under Greek Law
Crypto security, transparency and compliance in Greece
As from the start of 2021 digital wallet providers in Greece or from Greece to other countries must apply to HCMC for registration for Anti Money Laundering requirements. Custodianship of digital assets qualifying as financial instruments and must be licensed in accordance with the Greek MiFID Law. The Greek government requires digital tax records from all of its citizens in order to regulate the growth of the cryptoeconomy and the perennial problem of untraceable cash transactions in a society that loves to deal in cash. The recent emergence of a special digital wallet provider and cryptocurrency exchange registry by the Hellenic Capital Markets Commission (HCMC) is a much-needed step towards clearer and more cohesive regulation. If HCMC rejects the registration application, digital wallet providers and cryptocurrency exchanges are not allowed to pursue their activities in Greece or out of Greece.
More needs to be done in the regulation of cryptocurrencies to offer the confidence services providers need and also to attract overseas investment in the sector. It’s almost certain that this will come in the form of the EU Commission’s proposals for a new EU law on crypto.