Brussels is also considering taxing capital gains, although it admits a lack of data and the risk of capital flight
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The European Commission is analyzing the creation of a common tax on crypto assets across the European Union, in a new sign of Brussels' confiscatory advance over the private sector and new financial technologies.
The possibility arises from a leaked internal document, prepared ahead of discussions on the upcoming long-term community budget. There, the European Executive is studying various alternatives to turn the crypto market into a new source of funding for the bloc.
Brussels is trying to move forward with its regulatory ambitions
Among the options under consideration is a tax on transactions with crypto assets, something that is currently not applied broadly in the countries of the European Union. A tax on capital gains obtained by investors trading in cryptocurrencies is also being considered.
The alternative that bureaucrats plan to confiscate the most revenue from would be the transaction tax. According to the document itself, a tax of 0.1% on the value of each transaction would allow for the collection of between 3 billion and 4 billion euros annually for the European Union budget.
The scheme contemplates that crypto asset service providers, known as CASP, would function as collection and reporting points. Brussels would seek to rely on regulated platforms to identify transactions, collect the tax, and transfer the information to the authorities.
The second alternative, focused on capital gains, would have a lower revenue potential. According to the estimates included in the document, it could generate between 1 billion and 2.4 billion euros per year for member states, depending on market developments and application conditions.
One of the striking points of the draft is that stablecoins used as a means of payment would be excluded from any potential transaction tax. These digital assets maintain their value linked to a traditional currency or another external asset, such as the dollar, the euro, or even precious metals.
However, the document itself acknowledges that the idea faces significant obstacles. The Commission admits that the cryptocurrency market remains difficult to quantify reliably among the different member countries, making revenue projections uncertain.
Brussels is trying to move forward with its regulatory ambitions
Moreover, Brussels recognizes that revenues could be highly volatile, due to the strong price variations and trading volumes typical of the crypto market. Another evident risk is added: that users and companies might shift their activities to jurisdictions outside the European Union to avoid the new tax burden.
For now, the initiative is in a preliminary stage and does not constitute a formal legislative proposal. Any progress will have to overcome political and legal obstacles, in addition to defining how the revenue would be distributed and whether member states would act as mere collectors of a European tax.
