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How the Portuguese government treats cryptocurrencies?

Portugal is the most cryptocurrency-friendly country in Europe. While some countries, like China, completely prohibit everything related to the digital coin market, Lisbon opens up a lot of opportunities for miners and investors. Coin transactions are not banned in any way, the only restrictions apply to their exchange for services or goods. But there have been some recent developments here as well.

Official position of the Central Bank

Cryptocurrency is not a means of payment in Portugal. Therefore, two conclusions can be drawn:


– No one is obliged to accept or guarantee the acceptance of digital funds at face value.
– There are no instruments to ensure the rights of investors who prefer cryptocurrency. That is, if coins are lost for any economic reason, there is no way to recover what is lost. Simply because there is no corresponding reserve fund. The Central Bank of Portugal merely recommends weighing the pros and cons before deciding to keep savings in a cryptocurrency wallet rather than in a bank account.


Nevertheless, in May 2022, a real estate transaction attracted attention: for the first time in Portugal, an apartment was sold for bitcoins without conversion into fiat money. Previously, an exchange was required before the sale. Now the government has lifted these restrictions. But potential buyers and sellers will have to prepare more documents.

How the regulation is carried out

It is wrong to think that the Portuguese authorities let the process run its course. The cryptocurrency market has been under surveillance since September 2020, when the law Lei nº 58/2020 came out. Since then, any organizations providing cryptocurrency-related services within the country (exchange, transfer, storage) must report on their activities. This is done to prevent the sponsorship of terrorism and money laundering.

Taxation

One of the reasons why Portugal is considered a favorable place to store and cash digital coins is the lack of taxes. If you managed to earn from the growth of the cryptocurrency, you will not have to pay anything. Taxation will affect you only when transactions with funds are equivalent to professional activities (exchange offices, exchanges, etc.).
However, recent reports from the cabinet confirm that the government is working on the taxation of cryptocurrencies. For example, on May 16, 2022, Fernando Medina, Portugal’s new Minister of Finance, made a statement in which he talked about the study of the market. He said that the taxation mechanism is under development, and the main goal of the authorities is to offer “an adequate solution” without allowing “assets to be pushed out of the country.”

Conclusions

The Portuguese government is cautiously exploring the digital sphere without jumping to conclusions. It is still a country loyal to blockchain technology, with official sales and purchases with payments in cryptocurrency already taking place. But interested investors should keep an eye on the news, especially in the area of taxation.

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