The European Union adopted a new law that will mandate cryptocurrency firms to share customer holdings, which will be automatically shared between tax authorities, the European Council announced Tuesday.
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- The directive’s scope includes stablecoins, non-fungible tokens (NFTs), e-money tokens and crypto-assets issued in a “decentralized manner.”
- “There will be a mandatory automatic exchange between tax authorities of information which will have to be provided by reporting crypto-asset service providers,” said the European Council.
- The tax rules, also known as the Eighth Directive on Administrative Cooperation (DAC8), were first presented to the European Commission on Dec. 8, 2022.
- The directive will be published in the Official Journal, the European Union’s gazette of legal acts, and enter into effect on the 20th day following publication.
- Johanna Store, a press officer for the European Council, told Forkast that the directive will be published within the next two weeks. The exact publication date has not been set by the time of publishing.
- The European Council said that DAC8 is meant to complement the Markets in Crypto-Assets (MiCA), the European Union’s legal framework for digital assets regulations. MiCA requires crypto firms and exchanges to secure licenses to operate across the bloc while mandating stablecoin issuers hold suitable reserves.
- The European Securities and Markets Authority (ESMA) published the second consultation paper on MiCA on Oct. 5, 2023.