Dáil Éireann Debate, Thursday - 23 March 2023
203. Deputy Jim O'Callaghan asked the Minister for Finance if he proposes to introduce any legislation to regulate and or prohibit the use of crypto currency in Ireland; and if he will make a statement on the matter. [14469/23]
View answerMy department has been heavily involved in EU-wide negotiations to agree on the Market In Crypto Assets (“MiCA”) Framework as set out in the Digital Finance Package in September 2020. These negotiations have led to the development of the most comprehensive regulatory framework for crypto-assets, harmonising rules across the European Union and will formally be adopted by the EU parliament in the coming weeks.
The MiCA framework seeks to: bring legal clarity to consumers and companies; b) define what crypto-assets fall within its perimeter; c) safeguard financial stability, d) ensure smooth operation of payment systems and monetary sovereignty; e) ensure consumers are protected and f) foster innovation throughout the EU.
An 18 month transition period will commence once the Regulation comes into force following a final vote at the EU Parliament. In the interim, businesses offering virtual asset services will continue to be subject the 5th anti-money laundering Directive (5AMLD) transposed into Irish law by way of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021 ("2021 Act") and the provisions of the 2021 Act that relate to Virtual Asset Service Providers commenced on 23 April 2021.
The changes in the Act resulted in virtual currency exchange platforms and custodian wallet providers being in-scope of the anti-money laundering ("AML"), including rules for the performance of various client due diligence checks and other requirements when onboarding new customers.
As “defined persons” under the Act, VASPS in Ireland must adopt controls and procedures to counter money laundering or terrorist financing (AML/CTF) risks, report suspicious transactions and become registered with the Central Bank of Ireland. My officials continue to work closely with the Central Bank of Ireland as part of the preparations for the implementation of MiCA and the Central Bank continues to monitor development related to the sector to assess risks to consumer protection and financial stability.
Further to these developments, Revenue published an update to its tax and duty manual in April of last year that covered the taxation of crypto-assets for corporate and individual crypto-asset holders. The guidance reaffirmed current tax legislation principles apply to cryptocurrencies, as advised by Revenue on December 16th 2021 and that no special tax rules should apply to crypto assets and that general tax principles apply for their acquisition, ownership and disposal. Additionally, the Competition and Consumer Protection Commission in February of this year launched a new campaign that warned consumers, notably young people, of the volatility and risks involved with cryptocurrencies.
