Bitcoin, and other virtual currencies, took a large step closer to being treated as traditional money in Europe as EU top court judges decided that exchanging digital currency should be exempt from VAT. Stemming from a case in Sweden where David Hedqvist argued that his planned bitcoin exchange should be VAT exempt, a Swedish court referred the decision to the ECJ in June last year.
The decision is highly beneficial for all individuals and businesses in Europe that deal with cryptocurrencies as this ruling will ensure that the price of digital currency remains competitive with other currencies; using bitcoin or similar monies will not be discriminated against when buying or trading goods and services.
Whilst some countries, like the UK, had already decided to treat bitcoin as a currency, many others argued that it should be treated more like a commodity. Speaking on the decision, Hedqvist said “I always felt like this was the only sensible decision”, adding “It is important for businesses all over Europe that they finally have clear guidance regarding VAT and for some this could mean that they will get money back from the tax office.”
Although this shows progress for the acceptance of bitcoin and other cryptocurrencies, many banks and businesses are still wary of using it due to its anonymous nature and potential involvement with illegal activities. Developing safety and security measures, along with standardized regulations will be one of the next goals of digital currencies looking to be accepted for global use.