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In political discourse, the term “cryptocurrencies” is often used as if it were a single, uniform asset class.
In reality, however, this umbrella term encompasses a wide variety of very different technologies, use cases, and economic functions.
Bitcoin, stablecoins, tokenized securities, and memecoins are often grouped under the term “cryptocurrencies,” even though, from an economic perspective, they are often as diverse as gold, stocks, foreign currencies, or gift cards.
These differences already play an important role in regulation and supervision today. However, they are often overlooked in discussions about a flat-rate tax on cryptocurrencies.
Bitcoin is not a company
Bitcoin is fundamentally different from many other cryptocurrencies.
Bitcoin has:
- no publisher
- no management
- no central organization
- no dividends
- no profit sharing
- no claim against an issuer
No one owes a Bitcoin owner anything.
From an economic perspective, Bitcoin is therefore more akin to a digital commodity or digital asset than to a stock or a traditional financial product.
That is exactly why Bitcoin is often referred to as “digital gold.”
Stablecoins work like digital currencies
Stablecoins such as USDT or USDC serve a completely different purpose.
They are intended to remain as stable as possible and reflect the value of a traditional currency.
For example, a USDC token is always intended to be worth approximately one U.S. dollar.
Stablecoins are widely used:
- as a means of payment
- for international money transfers
- as a digital unit of the dollar on the Internet
Economically speaking, they are therefore more similar to foreign currencies or electronic money than to Bitcoin.
Tokenized securities are similar to stocks
Another category consists of what are known as security tokens.
These often represent, in economic terms:
- Company shares
- Bonds
- Claims to profits
- other traditional financial instruments
In many cases, they are economically almost indistinguishable from stocks or bonds.
It therefore makes sense to treat them in a similar manner to traditional securities for tax purposes.
Utility tokens are digital rights of use
Other tokens are primarily used to grant access to a platform or digital service.
They work more like:
- Memberships
- Vouchers
- Admission tickets
- Software Licenses
These tokens, too, differ fundamentally from Bitcoin or traditional financial assets.
Meme coins are often purely speculative investments
In addition, there are so-called memecoins.
They often have no concrete economic value and are based primarily on attention, community effects, and speculation.
Well-known examples include Dogecoin and numerous short-lived internet tokens.
They differ significantly from both Bitcoin and stablecoins or security tokens.
Privacy coins serve a different purpose
Privacy coins such as Monero and Zcash were developed to provide users with a higher level of financial privacy.
They, too, serve different purposes than Bitcoin or stablecoins.
Their unique feature lies not in their ability to store value, but in the technical design of transactions.
The digital euro would also be a cryptocurrency system
The planned digital euro will create a new category.
The digital euro would be:
- legal tender
- a liability of the European Central Bank
- digital central bank money
It would therefore not be directly comparable to Bitcoin, stocks, or stablecoins.
This example alone shows just how difficult it has become to categorize “all cryptocurrencies” in a blanket manner.
The real problem for lawmakers
The political debate often centers on the question:
Should cryptocurrencies be taxed differently?
The more difficult question, however, is:
Which cryptocurrencies, exactly?
Should Bitcoin be treated the same way as:
- A stablecoin?
- A tokenized share?
- A utility token?
- A memecoin?
- A digital euro?
The closer you look, the harder it is to give a general answer.
Treat equals equally
A fundamental principle of modern constitutional states is:
Things that are the same should be treated the same; things that are different may be treated differently.
That is precisely why stocks, gold, real estate, and foreign currencies are treated differently for tax purposes today.
They serve different economic functions.
The same question arises with regard to cryptocurrencies.
Should Bitcoin savers be treated differently for tax purposes than gold savers?
Should a stablecoin be treated differently from a U.S. dollar balance?
Should a tokenized share be treated differently from a traditional share?
These questions have by no means been fully answered.
A flat-rate crypto tax creates new problems
The more diverse the individual cryptocurrencies are, the more difficult it becomes to establish a blanket special tax rule.
Taxing something solely on the basis of the technical characteristic that it “exists on a blockchain” would be comparable to treating gold, stocks, and foreign currencies identically simply because they can be held digitally in a securities account.
Such an assessment would not reflect economic reality.
Instead of providing clarity, it would give rise to new demarcation issues, legal uncertainties, and bureaucratic burdens.
The existing system already offers a practical solution
The current tax treatment of cryptocurrencies may not be perfect. However, it has one key advantage:
It works.
Today, Bitcoin and other cryptocurrencies are generally treated as economic assets and classified within an existing tax framework that has applied to other assets for decades.
These include, among others:
- Gold
- Precious metals
- Foreign currencies
- Works of art
- Classic car
- Collectibles
These assets are already subject to the one-year holding period specified in § 23 of the Income Tax Act.
Precisely because individual cryptocurrencies vary so widely in their structure, this regulation provides a practical and legally sound framework.
Politicians are facing a classification problem
The current debate already highlights the central difficulty:
The term “cryptocurrencies” encompasses thousands of different projects with completely different characteristics.
- Should Bitcoin be treated like gold?
- Should a stablecoin be treated like a foreign currency?
- Should a tokenized share be treated like a regular share?
- Should a memecoin be treated differently from Bitcoin for tax purposes?
- And how would a digital euro fit into the picture in the future?
The deeper you delve into the subject, the harder it becomes to give a general answer.
This is precisely why we should not lightly abandon the existing tax framework and should instead maintain the current rule of tax equivalence between gold and foreign currency transactions. A separate, special rule for cryptocurrencies would disrupt this framework and would therefore require a compelling justification.
Especially in light of future developments such as the digital euro, the distinction between digital assets and digital payment methods is becoming more difficult rather than easier.
The status quo avoids new demarcation issues
Anyone who wants to eliminate the holding period or transfer crypto assets into a new tax system would first have to answer:
- Which cryptocurrencies are affected?
- What criteria are used for classification?
- Who decides on the assignment?
- What happens if a project undergoes technical or financial changes?
- How are new token categories handled?
These questions remain largely unanswered.
The current regulation avoids precisely these problems.
It generally treats cryptocurrencies as economic assets and thus classifies them within an already established tax framework.
This ensures:
- Legal certainty
- Practicality
- low administrative costs
- and consistent treatment of comparable assets
Conclusion: Don’t abandon proven practices unless absolutely necessary
The political debate over cryptocurrencies is often conducted as if they were a single asset class.
In reality, however, the term “cryptocurrencies” encompasses thousands of different technologies and use cases.
It is precisely this diversity that makes it advisable to maintain the existing tax system.
The one-year holding period has proven to be a practical solution. It provides legal certainty, avoids complicated issues of demarcation, and treats crypto assets in the same way as other assets such as gold, foreign currencies, art, or classic cars.
Anyone wishing to change this well-established system must not only explain the economic consequences but also convincingly demonstrate why the existing framework should be abandoned and how the numerous new demarcation issues are to be resolved in the future.
So far, no such justification is apparent. For this very reason, there are strong arguments in favor of maintaining the current status quo.
