Portugal
Retail_Trading_Status
Allowed-Regulated
Unknown
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- Analysis ID
- #192
- Version
- Archived
- Created
- 2025-04-13 04:43
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- 89522aec...
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Executive Summary
Retail cryptocurrency trading is allowed but regulated in Portugal. The Banco de Portugal oversees AML/CFT compliance for VASPs, and the CMVM will likely supervise CASPs under the incoming MiCA regulation. Law No. 83/2017 and the 2023 State Budget Law are key pieces of legislation. Portugal has moved towards a more defined regulatory environment, especially with taxation on crypto assets and the implementation of MiCA.
Key Pillars
The primary regulator is the Banco de Portugal for AML/CFT supervision of VASPs, and the CMVM will likely oversee CASPs under MiCA. Core compliance requirements include AML/CFT procedures and KYC for VASPs registered with the Banco de Portugal. Licensing or registration with the Banco de Portugal is required for entities carrying out activities with virtual assets for AML/CFT purposes.
Landmark Laws
Law No. 83/2017 (transposing the 4th AML Directive): Amended to include VASPs, requiring them to register with the Banco de Portugal and comply with AML/CFT regulations.
Regulation (EU) 2023/1114 (MiCA Regulation): Establishes a harmonized regulatory framework for crypto-assets across the EU, including Portugal, covering authorization, operation, consumer protection, and financial stability. Significant parts of MiCA become applicable from December 2024.
State Budget Law for 2023 (Law no. 24-D/2022): Introduced a specific tax regime for crypto-assets effective January 1, 2023, taxing income derived from crypto-assets.
Considerations
Crypto-assets are subject to a specific tax regime since January 1, 2023. Short-term capital gains are taxed at 28%, while longer-term gains may be exempt. Regulators (Banco de Portugal and CMVM) have issued warnings about the high risks associated with crypto-assets, including volatility, security risks, and lack of protection mechanisms.
Notes
Portugal was historically seen as a crypto-friendly jurisdiction due to a favorable tax regime prior to 2023. The current regulatory environment is evolving, with MiCA expected to increase regulatory oversight significantly. The State Budget Law for 2023 marked a shift by introducing specific crypto taxation rules. Source URLs are provided for the Banco de Portugal, CMVM, EU legislative texts, and reputable secondary sources, but some may require specific searches to locate the most up-to-date information.
Detailed Explanation
Detailed Explanation
Retail cryptocurrency trading is legally permitted in Portugal but operates within an evolving regulatory framework, accurately described as 'Allowed-Regulated'. Historically, Portugal was considered crypto-friendly, with capital gains from crypto often untaxed before 2023 under specific conditions. However, regulations have increased, primarily driven by the transposition of EU Anti-Money Laundering Directives and the upcoming Markets in Crypto-Assets (MiCA) Regulation.
Entities providing services related to virtual assets (VASPs) are subject to AML/CFT regulations. Since Law No. 83/2017, which transposed the 4th AML Directive and was amended to include VASPs following the 5th AML Directive, exchanges and custodian wallet providers must register with the Banco de Portugal. This requires demonstrating compliance with AML/CFT procedures, including KYC for retail users. The Banco de Portugal maintains a public list of registered VASPs.
The EU's MiCA Regulation (Regulation (EU) 2023/1114) introduces harmonized rules for crypto-asset service providers (CASPs) across the EU. Portugal is implementing MiCA, which will require CASPs operating in Portugal to obtain authorization, likely under the supervision of the Comissão do Mercado de Valores Mobiliários (CMVM). MiCA covers authorization, operation, consumer protection, market integrity, and financial stability. The full application of MiCA is phased, with significant parts becoming applicable from December 2024 onwards.
The State Budget Law for 2023, effective January 1, 2023, introduced a specific tax regime for crypto-assets. Short-term capital gains (assets held for less than 365 days) are taxed at a flat rate of 28% (or aggregated with other income, if more beneficial). Gains from assets held for more than 365 days may be exempt. Transaction fees and mining income are also addressed. The Banco de Portugal and the CMVM have issued public warnings regarding the risks associated with investing in crypto-assets, including volatility, lack of intrinsic value, security risks, and the lack of deposit guarantee schemes or investor compensation schemes.
Summary Points
Here's a bullet-point summary of the report on Retail Cryptocurrency Trading Status in Portugal, designed for quick comprehension:
Retail Cryptocurrency Trading Status in Portugal: April 13, 2025
I. Overall Regulatory Status:
- Allowed-Regulated: Retail cryptocurrency trading (buying, selling, holding) is permitted but operates within an evolving regulatory framework.
II. Key Regulatory Bodies & Roles:
- Banco de Portugal (BdP):
- Central Bank of Portugal.
- Responsible for AML/CFT supervision of Virtual Asset Service Providers (VASPs).
- Registers VASPs operating in Portugal.
- Issues public warnings about crypto risks.
- Comissão do Mercado de Valores Mobiliários (CMVM):
- Portuguese Securities Market Commission.
- Supervises securities markets and related activities.
- Will likely supervise many Crypto-Asset Service Providers (CASPs) under MiCA.
- Issues public warnings about crypto risks.
- European Union (EU):
- Sets the broader regulatory framework through regulations like MiCA.
III. Key Legislation & Regulations:
- Law No. 83/2017 (as amended):
- Transposes EU Anti-Money Laundering Directives (4th and 5th AML Directives) into Portuguese law.
- Requires VASPs to register with Banco de Portugal and comply with AML/CFT regulations.
- Regulation (EU) 2023/1114 (MiCA):
- EU's Markets in Crypto-Assets Regulation.
- Establishes a harmonized regulatory framework for crypto-assets across the EU, including Portugal.
- Covers CASP authorization, operation, consumer protection, market integrity, and financial stability.
- Phased implementation, with significant parts applicable from December 2024 onwards.
- State Budget Law for 2023 (Law no. 24-D/2022):
- Introduced a specific tax regime for crypto-assets, effective January 1, 2023.
IV. Requirements for Compliance:
- For Virtual Asset Service Providers (VASPs):
- Registration with Banco de Portugal.
- Compliance with AML/CFT regulations, including KYC requirements.
- Adherence to MiCA requirements (once fully implemented).
- For Retail Traders:
- Compliance with tax regulations regarding crypto-asset income.
- Awareness of risks associated with crypto-assets.
V. Notable Restrictions & Limitations:
- AML/CFT Requirements: Strict KYC and AML procedures for users of registered VASPs.
- Taxation: Crypto-asset income is now subject to taxation.
- Short-term capital gains (assets held < 365 days): 28% tax rate (or aggregated with other income, if more beneficial).
- Longer-term capital gains (assets held > 365 days): May be exempt from personal income tax.
- Regulatory Warnings: Banco de Portugal and CMVM have issued warnings about the risks of crypto investments.
VI. Recent Developments & Changes:
- Implementation of MiCA: Portugal is in the process of implementing the EU's MiCA regulation.
- Introduction of Crypto Tax Regime (2023): A specific tax regime for crypto-assets was introduced in 2023.
- Increased Regulatory Scrutiny: Overall increase in regulatory oversight of the crypto sector.
VII. Source URLs (for further research):
- Banco de Portugal - VASP Registration & List:
- CMVM - Crypto Information/Warnings:
- MiCA Regulation (Official EU Source):
- Portuguese Crypto Tax Regime (Reputable Secondary Source Example - Legal Firm Analysis):
- Joint Regulatory Warnings (Example):
Full Analysis Report
Full Analysis Report
Okay, here is the comprehensive report on the status of retail cryptocurrency trading in Portugal, prepared with the perspective of a financial regulatory analyst.
**Financial Regulatory Analyst Report: Retail Cryptocurrency Trading Status in Portugal**
**Date:** April 13, 2025
**Topic:** Retail_Trading_Status
**Description:** Assessment of the legality and regulatory environment for individual citizens and residents in Portugal regarding the buying, selling, and holding of cryptocurrencies, including applicable KYC/AML requirements and official warnings.
---
**1. Identified Status:**
Allowed-Regulated
**2. Detailed Narrative Explanation:**
Retail cryptocurrency trading, encompassing the buying, selling, and holding of crypto-assets by individuals, is legally permitted in Portugal. However, the activity operates within an evolving and increasingly defined regulatory framework, making 'Allowed-Regulated' the most accurate description.
Historically, Portugal was perceived as a crypto-friendly jurisdiction, partly due to a favorable tax regime where capital gains from crypto were often untaxed under specific conditions prior to 2023. While the activity itself was not prohibited, specific crypto-focused regulations were minimal beyond the transposition of EU Anti-Money Laundering Directives.
The current regulatory landscape is characterized by several key elements:
* **AML/CFT Framework:** Entities providing services related to virtual assets (Virtual Asset Service Providers - VASPs) are subject to specific Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) regulations. Since Law No. 83/2017 (which transposed the 4th AML Directive and was subsequently amended to include VASPs following the 5th AML Directive), entities wishing to carry out activities involving virtual assets, such as exchanges or custodian wallet providers, must register with the Banco de Portugal (the central bank). This registration process involves demonstrating compliance with robust AML/CFT procedures, including Know Your Customer (KYC) requirements for retail users engaging with these platforms.
* **EU's MiCA Regulation:** The European Union's Markets in Crypto-Assets (MiCA) Regulation (Regulation (EU) 2023/1114) establishes a harmonized regulatory framework across EU member states, including Portugal. MiCA introduces comprehensive rules for crypto-asset service providers (CASPs) covering authorization, operation, consumer protection, market integrity, and financial stability. Portugal, as an EU member, is implementing MiCA. This regulation will require CASPs operating in Portugal to obtain authorization, likely under the supervision of the Comissão do Mercado de Valores Mobiliários (CMVM – the Portuguese Securities Market Commission) for most activities, and adhere to stringent operational standards. The full application of MiCA is phased, with significant parts becoming applicable from December 2024 onwards. This represents a major shift towards a fully regulated environment.
* **Taxation:** A significant regulatory development occurred with the State Budget Law for 2023, which introduced a specific tax regime for crypto-assets effective January 1, 2023. This regime taxes income derived from crypto-assets. Short-term capital gains (assets held for less than 365 days) are taxed at a flat rate of 28% (or aggregated with other income, if more beneficial). Gains from assets held for more than 365 days may be exempt from personal income tax, preserving some element of the previous regime, but the overall framework now explicitly incorporates crypto into the tax system. Transaction fees and mining income are also addressed.
* **Regulatory Warnings:** Both the Banco de Portugal and the CMVM have issued public warnings regarding the risks associated with investing in crypto-assets. These warnings highlight volatility, lack of intrinsic value for some assets, security risks (hacking, fraud), and the potential for assets not being covered by deposit guarantee schemes or investor compensation schemes. These warnings underscore that while permitted, the activity is considered high-risk by regulators.
In summary, while individuals in Portugal face no legal prohibition on trading or holding cryptocurrencies, the environment is not unregulated. Mandatory AML/CFT registration for service providers, the introduction of a specific tax regime, and the ongoing implementation of the comprehensive MiCA framework clearly place Portugal in the 'Allowed-Regulated' category. The regulatory oversight is expected to increase significantly as MiCA becomes fully operational.
**3. Supporting Excerpts and Summaries:**
* **AML/CFT Registration (Banco de Portugal):**
* Summary: Banco de Portugal is the competent authority for the registration of entities carrying out activities with virtual assets for AML/CFT purposes. Entities must comply with legal and regulatory provisions concerning the prevention of money laundering and terrorist financing.
* Source Text Indication: The Banco de Portugal website details its role under Law No. 83/2017 regarding the AML/CFT supervision of VASPs. It maintains a public list of registered entities. (See link below).
* **MiCA Implementation (EU/CMVM):**
* Summary: The EU's MiCA regulation aims to create a harmonized framework for crypto-assets and related services across the EU, including Portugal. It covers issuer requirements, CASP authorisation and operation, market abuse prevention, and consumer protection. National competent authorities, like the CMVM in Portugal, will play a key role in supervision.
* Source Text Indication: Official EU legislative texts and explanatory documents detail MiCA's scope and timeline. CMVM communications often reference the evolving European regulatory landscape for crypto-assets. (See links below).
* **Crypto Taxation (Portuguese Tax Authority / Legal Firms):**
* Summary: Portugal's 2023 State Budget introduced specific rules for taxing crypto-asset income. Gains from crypto held less than a year are subject to a 28% tax rate, while longer-term holdings may be exempt. This marked a significant shift from the previous, less defined tax treatment.
* Source Text Indication: Analysis from reputable Portuguese legal and tax advisory firms extensively covers the changes introduced by Law no. 24-D/2022 (State Budget 2023). (Example link below).
* **Regulatory Warnings (Banco de Portugal / CMVM):**
* Excerpt Example (Conceptual, based on typical warnings): "The Banco de Portugal and CMVM alert consumers and investors to the high risks associated with virtual assets/crypto-assets. These include high price volatility, potential total loss of investment, operational and security risks (e.g., cyberattacks), and the fact that these assets are generally not covered by protection mechanisms like deposit guarantee or investor compensation schemes."
* Source Text Indication: Joint warnings and individual statements can often be found in the press release or investor alert sections of the Banco de Portugal and CMVM websites. (Example links below).
**4. Source URLs:**
* **Banco de Portugal - VASP Registration & List:**
* Information Page: [https://www.bportugal.pt/en/page/entities-carrying-out-activities-virtual-assets](https://www.bportugal.pt/en/page/entities-carrying-out-activities-virtual-assets)
* List of Registered Entities: [https://www.bportugal.pt/en/page/list-entities-registered-carry-out-activities-virtual-assets](https://www.bportugal.pt/en/page/list-entities-registered-carry-out-activities-virtual-assets)
* **CMVM - Crypto Information/Warnings:**
* General Investor Info/Alerts (Search for 'criptoativos' or 'crypto-assets'): [https://www.cmvm.pt/en/InvestorArea/WarningsAndAlerts/Pages/Comunicadosealertas.aspx](https://www.cmvm.pt/en/InvestorArea/WarningsAndAlerts/Pages/Comunicadosealertas.aspx)
* CMVM statement on MiCA (Example - may need searching for latest): Often found in news/press releases section.
* **MiCA Regulation (Official EU Source):**
* Full Text: [https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R1114](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R1114)
* **Portuguese Crypto Tax Regime (Reputable Secondary Source Example - Legal Firm Analysis):**
* Example Analysis (SRS Advogados): [https://www.srslegal.pt/en/news-and-insights/insights/portuguese-state-budget-for-2023-new-crypto-tax-regime/](https://www.srslegal.pt/en/news-and-insights/insights/portuguese-state-budget-for-2023-new-crypto-tax-regime/)
* *(Note: Primary source would be the State Budget Law (Lei n.º 24-D/2022) in the Diário da República Eletrónico, but legal firm summaries are often more accessible).*
* **Joint Regulatory Warnings (Example):**
* Banco de Portugal/CMVM/ASF Joint Alert (2021, principles still relevant): [https://www.bportugal.pt/en/comunicado/banco-de-portugal-cmvm-and-asf-warn-risks-associated-virtual-assets](https://www.bportugal.pt/en/comunicado/banco-de-portugal-cmvm-and-asf-warn-risks-associated-virtual-assets)
---
**End of Report**
Okay, here is the comprehensive report on the status of retail cryptocurrency trading in Portugal, prepared with the perspective of a financial regulatory analyst.
```text
**Financial Regulatory Analyst Report: Retail Cryptocurrency Trading Status in Portugal**
**Date:** April 13, 2025
**Topic:** Retail_Trading_Status
**Description:** Assessment of the legality and regulatory environment for individual citizens and residents in Portugal regarding the buying, selling, and holding of cryptocurrencies, including applicable KYC/AML requirements and official warnings.
---
**1. Identified Status:**
Allowed-Regulated
**2. Detailed Narrative Explanation:**
Retail cryptocurrency trading, encompassing the buying, selling, and holding of crypto-assets by individuals, is legally permitted in Portugal. However, the activity operates within an evolving and increasingly defined regulatory framework, making 'Allowed-Regulated' the most accurate description.
Historically, Portugal was perceived as a crypto-friendly jurisdiction, partly due to a favorable tax regime where capital gains from crypto were often untaxed under specific conditions prior to 2023. While the activity itself was not prohibited, specific crypto-focused regulations were minimal beyond the transposition of EU Anti-Money Laundering Directives.
The current regulatory landscape is characterized by several key elements:
* **AML/CFT Framework:** Entities providing services related to virtual assets (Virtual Asset Service Providers - VASPs) are subject to specific Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) regulations. Since Law No. 83/2017 (which transposed the 4th AML Directive and was subsequently amended to include VASPs following the 5th AML Directive), entities wishing to carry out activities involving virtual assets, such as exchanges or custodian wallet providers, must register with the Banco de Portugal (the central bank). This registration process involves demonstrating compliance with robust AML/CFT procedures, including Know Your Customer (KYC) requirements for retail users engaging with these platforms.
* **EU's MiCA Regulation:** The European Union's Markets in Crypto-Assets (MiCA) Regulation (Regulation (EU) 2023/1114) establishes a harmonized regulatory framework across EU member states, including Portugal. MiCA introduces comprehensive rules for crypto-asset service providers (CASPs) covering authorization, operation, consumer protection, market integrity, and financial stability. Portugal, as an EU member, is implementing MiCA. This regulation will require CASPs operating in Portugal to obtain authorization, likely under the supervision of the Comissão do Mercado de Valores Mobiliários (CMVM – the Portuguese Securities Market Commission) for most activities, and adhere to stringent operational standards. The full application of MiCA is phased, with significant parts becoming applicable from December 2024 onwards. This represents a major shift towards a fully regulated environment.
* **Taxation:** A significant regulatory development occurred with the State Budget Law for 2023, which introduced a specific tax regime for crypto-assets effective January 1, 2023. This regime taxes income derived from crypto-assets. Short-term capital gains (assets held for less than 365 days) are taxed at a flat rate of 28% (or aggregated with other income, if more beneficial). Gains from assets held for more than 365 days may be exempt from personal income tax, preserving some element of the previous regime, but the overall framework now explicitly incorporates crypto into the tax system. Transaction fees and mining income are also addressed.
* **Regulatory Warnings:** Both the Banco de Portugal and the CMVM have issued public warnings regarding the risks associated with investing in crypto-assets. These warnings highlight volatility, lack of intrinsic value for some assets, security risks (hacking, fraud), and the potential for assets not being covered by deposit guarantee schemes or investor compensation schemes. These warnings underscore that while permitted, the activity is considered high-risk by regulators.
In summary, while individuals in Portugal face no legal prohibition on trading or holding cryptocurrencies, the environment is not unregulated. Mandatory AML/CFT registration for service providers, the introduction of a specific tax regime, and the ongoing implementation of the comprehensive MiCA framework clearly place Portugal in the 'Allowed-Regulated' category. The regulatory oversight is expected to increase significantly as MiCA becomes fully operational.
**3. Supporting Excerpts and Summaries:**
* **AML/CFT Registration (Banco de Portugal):**
* Summary: Banco de Portugal is the competent authority for the registration of entities carrying out activities with virtual assets for AML/CFT purposes. Entities must comply with legal and regulatory provisions concerning the prevention of money laundering and terrorist financing.
* Source Text Indication: The Banco de Portugal website details its role under Law No. 83/2017 regarding the AML/CFT supervision of VASPs. It maintains a public list of registered entities. (See link below).
* **MiCA Implementation (EU/CMVM):**
* Summary: The EU's MiCA regulation aims to create a harmonized framework for crypto-assets and related services across the EU, including Portugal. It covers issuer requirements, CASP authorisation and operation, market abuse prevention, and consumer protection. National competent authorities, like the CMVM in Portugal, will play a key role in supervision.
* Source Text Indication: Official EU legislative texts and explanatory documents detail MiCA's scope and timeline. CMVM communications often reference the evolving European regulatory landscape for crypto-assets. (See links below).
* **Crypto Taxation (Portuguese Tax Authority / Legal Firms):**
* Summary: Portugal's 2023 State Budget introduced specific rules for taxing crypto-asset income. Gains from crypto held less than a year are subject to a 28% tax rate, while longer-term holdings may be exempt. This marked a significant shift from the previous, less defined tax treatment.
* Source Text Indication: Analysis from reputable Portuguese legal and tax advisory firms extensively covers the changes introduced by Law no. 24-D/2022 (State Budget 2023). (Example link below).
* **Regulatory Warnings (Banco de Portugal / CMVM):**
* Excerpt Example (Conceptual, based on typical warnings): "The Banco de Portugal and CMVM alert consumers and investors to the high risks associated with virtual assets/crypto-assets. These include high price volatility, potential total loss of investment, operational and security risks (e.g., cyberattacks), and the fact that these assets are generally not covered by protection mechanisms like deposit guarantee or investor compensation schemes."
* Source Text Indication: Joint warnings and individual statements can often be found in the press release or investor alert sections of the Banco de Portugal and CMVM websites. (Example links below).
**4. Source URLs:**
* **Banco de Portugal - VASP Registration & List:**
* Information Page: [https://www.bportugal.pt/en/page/entities-carrying-out-activities-virtual-assets](https://www.bportugal.pt/en/page/entities-carrying-out-activities-virtual-assets)
* List of Registered Entities: [https://www.bportugal.pt/en/page/list-entities-registered-carry-out-activities-virtual-assets](https://www.bportugal.pt/en/page/list-entities-registered-carry-out-activities-virtual-assets)
* **CMVM - Crypto Information/Warnings:**
* General Investor Info/Alerts (Search for 'criptoativos' or 'crypto-assets'): [https://www.cmvm.pt/en/InvestorArea/WarningsAndAlerts/Pages/Comunicadosealertas.aspx](https://www.cmvm.pt/en/InvestorArea/WarningsAndAlerts/Pages/Comunicadosealertas.aspx)
* CMVM statement on MiCA (Example - may need searching for latest): Often found in news/press releases section.
* **MiCA Regulation (Official EU Source):**
* Full Text: [https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R1114](https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R1114)
* **Portuguese Crypto Tax Regime (Reputable Secondary Source Example - Legal Firm Analysis):**
* Example Analysis (SRS Advogados): [https://www.srslegal.pt/en/news-and-insights/insights/portuguese-state-budget-for-2023-new-crypto-tax-regime/](https://www.srslegal.pt/en/news-and-insights/insights/portuguese-state-budget-for-2023-new-crypto-tax-regime/)
* *(Note: Primary source would be the State Budget Law (Lei n.º 24-D/2022) in the Diário da República Eletrónico, but legal firm summaries are often more accessible).*
* **Joint Regulatory Warnings (Example):**
* Banco de Portugal/CMVM/ASF Joint Alert (2021, principles still relevant): [https://www.bportugal.pt/en/comunicado/banco-de-portugal-cmvm-and-asf-warn-risks-associated-virtual-assets](https://www.bportugal.pt/en/comunicado/banco-de-portugal-cmvm-and-asf-warn-risks-associated-virtual-assets)
---
**End of Report**
```
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