Crypto Trading in EU

Crypto Trading in EU

In this article, we investigate how attractive crypto trading in EU is in terms of several factors. These are regulations, historical development, market size, and available platforms. We conclude with future prospects and overall outlook of the EU crypto market and trading in the region.

To complement reading this article, we would suggest for you to check out our other guides regarding trading strategies. These will help you understand how to prepare and conduct event and geopolitical analysis, depending on your trading needs.

Is Crypto Trading Legal in EU?

Currently, it is legal to conduct operations using cryptocurrencies in the EU. Trading cryptocurrencies are thus possible, with several platforms available for use in this aspect. On the other hand, there is no specific policy regulating the crypto industry, as the case is in the US.

The EU’s central bank released the statement in 2016 that crypto coins are part of the online asset classification. The parliament and Central bank agreed that bitcoin and other altcoins cannot be seen as legal tenders, as governmental bodies do not control them.

VAT, GST, and taxes are not applicable when conversions into fiats are in question but the purchase of goods and services is. Trading carries tax implications only when profit is made, incurring capital gains and income taxes in the process.

Fiat vs. Crypto Regulation

As mentioned before, Central bank and EU parliament came to a conclusion that cryptos are not currencies (legal tender) but more like commodities. Still, traders have the right to convert them into fiats and purchase goods and services online. Financial regulation is thus not applicable to cryptos, meaning that accounting treatment sees coins as assets, evaluatedthrough fair value.

As of 2017, all exchanges and trade platforms need to provide detailed KYC (Know Your Customer)and MAL (Anti-Money laundering) details regarding traders. Thus, verification of identity became a must-have for all investors that reside in EU.

Responsible Body

In essence, EU’s Central bank draws out all restrictions and policies regarding the industry. Due to the lack of specific policy, there is no agency that is specifically responsible for the market. Decentralized nature and IFRS treatment of cryptos see them as online assets, rather than financial derivatives, like fiats are.

The European Council, however, voted in 2018 to bring more tight regulations regarding cryptocurrencies. The general direction is to implement a new set of rules for trading platforms, as to prevent criminal activities. Recent hacking incidents, as well as money laundering, pushed EU officials for tighter control.

It is worthy to note that, although centralized, EU parliament and Central Bank allows individual States to create their own policies. At this time, there are no large differences between EU countries but the situation might change in the future.

Past Policies

The start of industry developed can date back to 2009 when bitcoin came to life through efforts of Satoshi. Since then, numerous platforms opened their websites for business. We now have several large trading centers that offer services for several years now. BitPanda is one of them, as well as Bitstamp, CEX.IO and several others as well.

As for the regulations, the EU parliament started out its investigations in 2015. In 2016, the Central Bank prohibited banking operations related to cryptos until the full regulation is in place. In 2017, the said restrictions were lifted, allowing trade once more to take place within EU.

Market Size and Development

Currently, the European market is one of the largest in the world. A large number of trading centers operate in Europe, both domestically and internationally-based. There is also a variety of deposit methods and trading pairs available, providing the necessary flexibility for European traders. The best sign of development is perhaps ICOs, which grow in number and value.

EU holds little over 10% of the market share in terms of ICO numbers, though EEA members such as Switzerland and UK, leading the charts with combines 16%. You can check out the map in the picture below to get a better idea.

Crypto Trading in EU ICO watchlist

What the Future Holds

With new regulations in store, it is evident that EU officials will wrestle for more control. The market is decentralized, thus stricter KYC and AML policies can be seen on the horizon. Apart from policies, countries like Switzerland and UK do offer a safe haven for ICOs. Thus, we can expect further development of the trading market in the near future through freshly-made platforms.

The market size is large enough to support new entrants into the market while trading cryptos are gaining numbers in recent months.

Available Platforms

There are several trade platforms that operate form EU-based headquarters but also a greater number of international ones as well. We present both, as they provide several benefits that you should be aware of while conducting crypto trading in EU.

Kraken – Although its office is not based in Europe, its main weapon for trade is BTC to EUR trading pair. Kraken also allows European investors to use its services without a scanned ID for up to a monthly value of $2.000. Thus, SEPAtransfers work if you plan to fund your account using a bank transfer. To know more about the platform, you should visit and read our guide about Kraken.

CEX.IO – This UK-based company offers EUR trade for investors coming from EU states. You do need a verified account in order to engage in margin trading activities that CEX.IO offers. With adequate liquidity and trade volume, you can use functions such as Market, Limit, and Stop-Loss. To know more about CEX.IO, read our guide about it, while leverage function can be seen below.

Crypto Trading in EU CEX.io

BitPanda – Based in Austria, this broker offers simple trading functions, revolving around Market and Limit functions. You have the ability to work with currencies such as bitcoin, Ethereum, Litecoin, Ripple, and several others. Verification is a must due to the KYC and AMLrequirements form European Central Bank. We made a review about this trading platform that you should definitely read if you plan to trade there.

Conclusion

We investigated the current situation in the industry regarding the crypto trading in EU. The future looks bright for the region, as many new trading platforms are set to open in the following period. The government officials, however, will look to strengthen their control over the market by introducing stricter KYC and AMLpolicies.

Apart from EU, we made articles regarding other regions around the world. You should check them out, if you happen to live in US, Canada, UK, or in Africa.

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