For the last year we’ve been hearing a lot about Bitcoin and all the controversy that comes with it. So, if you don’t know what Bitcoin is here is a brief summary:
First thing: what is a cryptocurrency?
Cryptocurrencies are digital currencies that exist only virtually. They are decentralized and not controlled or issued by any central bank or body – which makes them immune, in theory, from direct control by authorities.
There is a predetermined amount of a cryptocurrency that will be released over time. In the case of Bitcoin, no more than 21 million ‘coins’ will be circulated, with nearly 17 million ‘coins’ in circulation at the time of writing.
Cryptocurrency value is driven by demand and supply, as well as external market factors such as investor confidence and regulation. Because these factors aren’t so predictable, values can be highly volatile – which you can see from the graph below of Bitcoin’s value over the past year.
To pay with a cryptocurrency, you do so online to a vendor that accepts the currency (here’s a list of stores accepting Bitcoin). Values may be high but unlike with physical coins, you can buy, sell and pay with fractions of coins. And to buy or sell Bitcoin you can use an app or broker site, such as Coinbase:
Security is handled by cryptography and blockchain but the security aspect of cryptocurrency is quite technical. Here’s a good primer on some of the blockchain security aspects.
Are Bitcoins and other cryptocurrencies legal and accepted in Spain?
Yes, cryptocurrencies are legal across Spain and Europe. A few countries like Ecuador have moved to illegalize or restrict their use but there are no current barriers to buying things with Bitcoin and other cryptocurrencies in the EU.
As long as you have the currency and an online vendor to accept the payment then you’re good to go.
And what’s the EU’s policy on Bitcoin?
Such a question is not easily answered at the moment. The EU has recently agreed tougher regulations on the basis of trying to stop criminal activities hidden underneath anonymous cryptocurrency transactions.
However, when you look at the detail, what this is likely to mean is that the authorities will more closely monitor individuals using currencies like Bitcoins, rather than any fundamental restrictions under normal circumstances.
So, if you’re using a cryptocurrency in a non-criminal way then you should be fine for now – but bear in mind the status of cryptocurrencies is pretty changeable, just like their values.
Can I buy Spanish property with cryptocurrencies?
It’s not easy but theoretically you could. Bitcoin is becoming an alternative way to buy property.
One of the first properties to put on the market for a Bitcoin-exclusive sale is the Unesco-listed Palacio Bardaji in Ibiza, Spain. And new websites, like Bitcoin Real Estate, are springing-up as this type of purchase becomes more popular. A growing number of Spanish properties are now listed online.
However, those opportunities are still few and far between and it’s hard to say if it’ll catch on.
What about other investments – or setting up a company?
The use of cryptocurrencies is still emerging, so the laws are complex depending on the type of investment – and new laws are also being introduced to regulate the market.
As such, working with lawyers and also notary publics who are experts in the latest digital laws is key.
So, if you’re an investor with a query about cryptocurrencies, we advise getting in contact with Lecuidy to speak to us about your plans. We can advise you on the best way of moving forward with the latest laws in mind.
Or get in touch for a free consultation on this topic below: