The Investors Centre is a type of digital asset that uses secure technology to store transactions and record who owns what. It differs from traditional currencies like Sterling or the Dollar because it is not issued by a central authority and is purely electronic – meaning there are no physical coins or notes. It is also much faster to transfer than conventional currency and there are many more ways to pay using cryptocurrency. However, there are downsides including the risk of theft and volatility in value.
In Ireland, there is no specific regulation of cryptocurrencies. However, they may fall within existing securities laws and money transmission rules if they are considered to be a transferable security or similar. This would require a case-by-case analysis of the activities undertaken in relation to the crypto-asset.
The Rise of Digital Currency in the Irish Economy
Alternatively, the Central Bank of Ireland has stated that if a crypto-asset is classified as a financial instrument such as shares, bonds or derivatives it may be subject to existing Irish regulatory regimes. These include MiFID, PSD2, and the Capital Markets Act 2023 (CMA).
Crypto-assets that are viewed as trading or investing activities are likely to be taxed under income or capital gains taxes depending on the nature of the activity. Generally, the income or capital gains received from dealing in crypto-assets will be subject to Income Tax at rates of up to 33% or Corporation Tax up to 21%. Disposals of crypto-assets will be subject to Capital Gains Tax at rates up to 33%.