Patrick Hansen, Circle’s EU strategy and policy lead, says the bloc’s crypto tax revenues may not last. The European Commission has made a total of $23 billion across the 2028 to 2034 EU budget.
Hansen said that a crypto-based transaction tax would push users to DeFi protocols. Self-storage wallets and non-EU locations would destroy the average volume that Brussels hopes to capture.
What the Commission includes
The scumbags The Commission’s working paper outlines two types of crypto tax for member states to consider:
- A 0.1% tax on the value of crypto transactions could generate $3.5 billion to $4.7 billion a year.
Crypto-asset service providers (CASPs) can serve as collection and reporting centers.
- A separate capital gains tax on realized crypto profits would raise approximately $1.2 billion to $2.8 billion per year.
Combined, these two measures could bring about $23 billion into the EU’s seven-year budget. Officials agree these numbers are subject to market fluctuations.
The paper shows that stablecoins are used as payment may fall outside the sales tax.
Capital gains tax it usually won’t apply to dollar-denominated tokens, due to their low value.
Why Hansen Thinks Predictions Have Been Missed
Hansen pointed out three weaknesses in the design:
- More reliable data from the DAC8, the EU crypto reporting systemit will only arrive from 2027. Early estimates are based on insufficient inputs.
- The proposal also requires the approval of the Council as well as the EU’s harmonized tax system.
France has pushed hard for new EU funding. Crypto tax compliance burden and resistance to exchange—a rich economy like Malta can stiffen the opposition.
- The moral hazard is very high, according to Hansen.
Users who are facing an average interest rate can move the service to self storage bag optionsDeFi protocols, or non-EU platforms. Any sales tax is based on the volume.
“Any tax on cryptocurrencies could accelerate migration to tax-free transactions … and/or tax-free products … he said.
Cyprus, which has leadership around the Council, plans to share the revised proposal on June 10.
The result shows whether crypto will remain on the menu, and how it interacts with blockchains MiCA consultation.
A note $23 Billion EU Crypto Tax Forecast Pulls Back From Leading Circle Policy appeared for the first time BeInCrypto.
