ECB requires tax on transactions with bitcoin

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Ewald Nowotny, head of the National Bank of Austria, said in an interview with a German newspaper that anyone involved in a financial transaction should be clearly identified, in addition to paying the value-added tax (VAT). According to the Daily Mail, the banker also expressed concern about potential applications for money laundering.

Comments from Nowotny come a few days after ECB board member Benoît Cœuré told Caixin Global that bitcoin is in a bubble. Like his Austrian counterpart, Cœuré said that one of the main problems associated with bitcoin is related to tax evasion and money laundering.

Both bankers said that bitcoin is not a currency, and Cœuré adding that investors would not be able to use it as a means of payment.

However, he said that distributed ledger technology (DLT) as a whole shows prospects for wholesale and retail applications, noting the recent joint venture of the ECB with the Japanese Bank to explore technology options.

While central banks around the world are studying how to use the DLT to upgrade or replace existing financial systems, the technology is still too young for any meaningful implementation, he said.