Political Party SPD advocates for the elimination of the one-year statute of limitations
In the ongoing coalition negotiations between Germany's Social Democratic Party (SPD) and the Christian Democratic Union (CDU), the former is pushing for a significant change in the country's approach to cryptocurrencies. The SPD is demanding the abolition of the rule that makes gains from trading cryptocurrencies tax-free if the coins are held for a year in Europe.
This rule, considered extremely generous, has been one of Europe's unique advantages in the global cryptocurrency industry. However, the SPD sees gaps in the regulation of cryptocurrencies that still need to be closed, and they are not focused on the potential impact on Europe's competitiveness in the industry.
The SPD's proposal, if successful, could eliminate Europe's last locational advantage for Bitcoin and other cryptocurrencies. The party is also advocating for cryptocurrency gains, similar to stocks and ETFs, to be subject to the withholding tax, which the SPD wants to increase from 25 percent to 30 percent.
The SPD's stance on cryptocurrencies reflects a broader trend in European politics. With the European shift to the right, left-leaning politics are gaining more prominence. This is particularly evident in the EU regulation MiCAR, which has made Europe at risk of falling behind other regions in terms of attracting cryptocurrency companies. The MiCAR licenses are valid throughout the EU, potentially putting Europe at a disadvantage due to its tendency towards bureaucracy and over-regulation.
Despite the potential loss of Europe's last locational advantage for cryptocurrencies, the SPD does not seem concerned. The party, which achieved its worst-ever result of 16 percent in the recent federal election, is making left-leaning demands in the coalition negotiations with the CDU.
The coalition negotiations between the SPD and CDU are causing controversy. Some speculate that the initiative has little chance of success, but no source is cited for this assessment. The success of the negotiations will have significant implications for the future of the cryptocurrency industry in Europe.
As the negotiations continue, it remains to be seen whether the SPD's push to eliminate the tax-free rule for cryptocurrency gains will be successful. If it is, Europe's locational advantage for cryptocurrencies could be significantly diminished, potentially leading to a shift in the global cryptocurrency landscape.
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