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Serbia Enacts Law Regulating Cryptocurrency Trading, Positioning Itself as a Leader in Digital Asset Compliance
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Belgrade, Serbia - In a major move to establish itself as a leader in digital asset compliance, Serbia has enacted the Law on Digital Assets, effective June 30, 2021. The law provides a comprehensive framework for regulating cryptocurrency trading and tax issues related to this rapidly growing market.
Understanding the Global Digital Assets Market
The Serbian government has demonstrated its understanding of the global digital assets market by enacting regulations that enable innovation, attract foreign expertise and private equity, and facilitate small and medium-sized enterprises (SMEs) to access venture capital and crowdfunding for start-ups.
Definition of Digital Assets
According to the law, digital assets are defined as a digital representation of value that can be bought, sold, exchanged, or transferred electronically. The definition does not include reference to blockchain technology or distributed databases, making it technologically neutral and encompassing all digital assets regardless of their underlying technology.
Types of Digital Assets
The law distinguishes between two types of digital assets: virtual currencies (cryptocurrencies) and digital tokens. For the purposes of this article, we will focus on virtual currencies, which are defined as a digital asset that is not issued or guaranteed by a central bank or public authority, is not necessarily attached to a legal tender, and does not have the legal status of money or currency.
Ownership and Trading of Cryptocurrencies
The law permits both natural persons and legal entities to own and trade cryptocurrencies in Serbia without the need for prior permits or licenses. Cryptocurrencies can be acquired through mining, initial offerings of digital assets, secondary trading, and over-the-counter (OTC) markets.
Tax Measures
Regarding taxes applicable to possessing and trading with cryptocurrencies, the Serbian government has introduced a range of tax measures. These include:
- Capital gains tax at a rate of 15% for legal entities and natural persons
- Tax incentives such as exclusion of gains in the tax base if invested in the basic share capital of another resident company or investment fund
Licensing Requirements
The law requires digital assets service providers to be licensed by the Securities Commission or National Bank of Serbia, depending on the services they intend to provide. Advisory services related to digital assets can be provided by licensed service providers or non-licensed individuals and companies, but must disclose their lack of license.
Financial Institutions
Financial institutions under the supervision of the National Bank of Serbia are prohibited from providing digital assets services, a measure aimed at preserving financial stability.
Conclusion
Serbia’s new law on digital assets is seen as a major step forward in establishing itself as a leader in cryptocurrency trading compliance. The law provides a clear and comprehensive framework for regulating this rapidly growing market, making it an attractive destination for entrepreneurs and investors alike.