The Bitcoin Thinktank

The Bitcoin Thinktank section provides economic analysis, insight and advanced considerations about Bitcoin or general crypto payment issues.

Subjects focus on similar areas of crypto payment systems or so-called private “currencies” for both general users as well as developers, “miners”, commercial speculators or other interested parties.


Finding Greener Pastures in Selected Bitcoin-Friendly European Countries

A number of Bitcoin businesses have left or are in the process of leaving the United States. As a reason for their decision, these businesses quote the overall climate for innovative and startup businesses in the U. S. which has become too unfavourable.

Back in March, a Federal judge declared Bitcoin exchangers and administrators money services businesses and therefore liable to register as such. This involves burdensome procedures along with financial requirements of posting millions of dollars in insurance bonds to legally operate under applicable rules in the U. S. It has often been pointed out in recent years that even opening up the proverbial lemonade stand in the U. S. is no longer economically viable. The ever increasing load of regulations and administrative hurdles makes it impossible for many kinds of businesses including Bitcoin-related ones to meaningfully operate or continue their operations in the U. S.

Preferred destination for moving and re-opening Bitcoin operations abroad range from Panama with its comparatively low overall level of government red-tape to Canada (currently having a more or less hands-off policy toward Bitcoin) and several European countries. Among the most welcoming jurisdictions for Bitcoin operations are Sweden, Norway, Germany, the U. K. and, to a lesser extent, also France.

The lesser load of compliance requirements gives European Bitcoin businesses an edge over their U. S. counterparts and, particularly in a free market such as the Bitcoin phaenomenon, will lead to lower operating cost, resulting lower prices for merchants and users, and ultimately better overall acceptance for Bitcoin services based in Europe or comparable locations.

While some of these (Germany in particular) might be least expected to be “flags of convenience”, their overall climate and domestic authorities’ legal track record offer many reassuring features coming in very handy for Bitcoin operators. Bitcoin businesses need not put up with working their way through potentially unfamiliar German regulations though if they don’t want to: locating in “minor” countries such as Sweden, Norway, Denmark or similar is as good as being in a “big” European market due to Europe’s particular “common market” regulations. Therefore, selecting a proper venue can also be done on the basis of other factors or incentives. Talk about some forum shopping in a hugely diverse selection of jurisdictions…

With real estate prices currently clearly a buyers” market and and a resulting abundance of suitable low-cost business premises, some of these are particularly attractive. Business rates, incorporation requirements and taxes have been widely reformed, trimmed downward recently and are now well within reach for even the smallest operations. On top, all of these countries (including non-EU Norway open to favourable EEC common market rules by way of special EEA status plus bi-lateral treaties) allow Bitcoin operations licensed in any one of these countries (with particularly attractive regulations) to also legally operate throughout all other EEA ( that is, EU plus EFTA) countries automatically.

Based on our consulting experience, we can offer some advice as to the local compliance situation(s) and will also cover the ins and outs of particularly suitable Bitcoin jurisdictions in more detail in a separate series of upcoming Bitcin Country Reports.

2 thoughts on “The Bitcoin Thinktank

    1. Taking donations in Bitcoin (or any Crypto coin) might be mainly a technical issue of implementing a simple payments or donations function. While we cannot give any legal or tax advice on this matter, we are aware of and could recommend a number of technical solutions likely matching your systems deployed.

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