How to crypto 101: Spain

Cryptocurrency is becoming a significant part of Spain’s financial and tech landscape. People use it to send money, pay for goods, or just try something new. It’s not just tech lovers - regular individuals are having a go at it too. But the rules? Not so easy to follow. Spain is making new laws, and they matter. If you live here or do business, you need to know what’s legal and what’s not. This guide breaks it all down in plain words, so you’re not left guessing.

What crypto means under Spanish law

Spain has taken a careful, rule-based approach to defining what crypto assets are. Lawmakers and regulators here don’t see virtual coins as money in the same way they see the euro. In fact, under Spanish law, only the euro can be legal tender. The idea was clearly stated in Law 46/1998, which confirmed that from 1999, the euro would be Spain’s official currency. Because of this, cryptocurrency in country is not seen as official money, but rather as a new kind of digital asset with special values around it. This distinction forms the foundation of Spain crypto regulation.

The Bank of Spain plays a big part in shaping how the country views crypto. One important example is a pilot project that allowed a fintech entity called MONEI to test a digital euro. This test, done through country’s financial sandbox, showed how blockchain might be used in everyday payments. The digital euro, called EURM, was built on Ethereum 2.0 and let people send tokens from one person to another. This move did not mean Spain would replace its currency. But it did show the government’s interest in understanding and using blockchain technology, instead of banning or ignoring it. Projects like this shape how cryptocurrency in Spain develops in a more practical way. It also suggests how future Spain crypto regulation could adapt to new methods of payment if digital euros become more common.

Cryptocurrency is also shaped by how much importance the government places on protecting people. In the past, Spain saw cases of fraud linked to digital coins. That history made lawmakers more cautious. They don’t want residents to lose money or fall into scams. So instead of calling digital coins legal money, they treat it more like a financial product. This means any company operating with cryptocurrency must follow strict rules, especially when it comes to safety and who is allowed to operate. These rules help make Spain crypto regulation more solid and trusted. In the long run, this level of oversight may also shape how cryptocurrency tax systems work with registered and legal crypto businesses. It also gives people more rights when dealing with digital assets.

In 2021, Spain made big changes to its anti-money laundering laws. A new Royal Decree changed the existing law from 2010. It added official terms for things like virtual currency and defined who needs to register with the Bank of Spain. Now, crypto businesses like exchanges and wallet providers must go through this process. This step matters a lot. It helps stop illegal use of digital coins and brings country in line with EU crypto framework rules. It also supports Spain crypto regulation on a national level. The tighter AML rules reflect how cryptocurrency is becoming more mature and regulated. As more companies register, it becomes easier for tax officials to track digital asset activity and apply cryptocurrency tax policies with greater accuracy. These changes also help with managing transparency and enforcement.

How Spain handles crypto regulation without a dedicated law

Spain does not have a single law that covers every part of the crypto space. Still, it has started putting real rules in place to manage how crypto works. While there is no full legal code built just for blockchain or digital coins, the country uses parts of existing laws to control the market. This helps bring order to a fast-moving space. It also helps the public know that crypto is not outside the law. As Spain crypto regulation evolves, this layered approach allows authorities to respond to new developments without waiting for a single all-in-one law.

One key step came with Royal Decree 7/2021. This rule gave the country a clear way to define virtual currencies. It also said which kinds of cryptocurrency service providers need to register and follow anti-money laundering rules. Even though digital coins are not legal money under Spanish law, they still fall under the watch of local and EU regulators. When exchanging crypto one-on-one, digital coins is often seen as a kind of property. But when sold in larger offerings, like ICOs, it may be treated more like a financial product. These legal categories are central to Spain crypto regulation, helping determine what rules apply in different contexts.

Spain also uses its general financial rules to deal with token sales and public offerings. Under the new LMV, some tokens can be seen as securities. That means companies must follow certain steps before creating them to the public. This rule has been in place since 2018 but got stronger with the LMV in 2023. It gives power to the CNMV to monitor how these digital assets are used in country.

These steps lay the groundwork for stronger cryptocurrency tax oversight, as legal definitions make it easier to track and tax such assets. Spain is also getting ready for MiCA.

While the law comes from the EU, Spain’s regulators are already adjusting their approach. It includes how crypto is promoted  in advertising, how it’s taxed, and how it fits into the larger financial system. That broader view continues to shape how cryptocurrency tax rules will apply going forward, reinforcing the long-term goals of Spain crypto regulation.

How Spain taxes crypto and digital assets

In Spain, the tax system has started to catch up with the rapid growth of crypto. A new rule called Royal Decree 249/2023 came into force in April 2023. It makes it clear that people and businesses must begin declaring their crypto activities starting in 2024. This rule marks a new chapter in how Spain cryptocurrency tax enforcement works. If you live in the country or run a business here, you are expected to declare what you own and what you do with digital assets. These requirements are part of the broader Spain crypto regulation effort to bring digital finance under clearer legal control.

The Spanish Tax Office now requires reports on crypto balances, transactions, and foreign-held digital assets. It means that even if you hold crypto abroad, you may still need to tell the Spanish tax authority about it. There’s also a new form, called 721, which replaces the old 720. It helps track foreign holdings more clearly. The rule also says that companies who help people buy or store crypto must file detailed yearly reports. It brings a higher level of control and improves country cryptocurrency tax reporting. Together with other measures, these tax obligations reflect how Spain crypto regulation is evolving in step with the EU framework and global standards.

As the system matures, the way crypto in Spain is taxed will likely become even more refined. With forms like 172 and 173, tax officials can follow asset flows better. That makes cryptocurrency in country more transparent - and easier to regulate. These changes are considered to capture gains and profits from trading, staking, or converting crypto into fiat, and tracking incomes and earnings from such activity.

Verifying users and following AML rules in Spain

Spain wants to make sure cryptocurrency is not used for crime. Back in 2021, the government took changes to its money-laundering law. It added new rules for digital money. Now, crypto is seen as a digital thing that has value. It’s not real money, but people still use it to trade and store wealth. This change made it easier to write laws for cryptocurrency and decide who must follow them. It also laid a foundation for clearer tax rules, especially as more users and businesses enter the space. These early steps were key in forming the base of what we now see as Spain crypto regulation.

If a company lets people buy or store crypto, it needs permission. It must also register with the Bank of Spain. The part is important. Any digital coins business that helps customers move money now has to check who they are.

They can’t just open an account for someone without knowing their name. They must ask for ID and keep records. These steps help stop fraud and make cryptocurrency in Spain safer. As part of Spain crypto regulation, these checks are now standard for licensed platforms, providers and investors.

The rules also help tax officials do their job. When companies know who is trading, it’s easier to follow the money. This helps with Spain cryptocurrency tax laws too. People can’t just hide crypto and hope no one sees. Now, there’s more control. The country wants crypto to grow, but also wants it to be clean. However, these laws help with both. Over time, they may make most people trust cryptocurrency and use it every day. Strong Spain crypto regulation ensures that growth comes with accountability, involving all licensed actors who should follow specific obligations.