Another country becomes crypto-friendly: what has changed in Czech Republic?

Czech Republic introduces new crypto-friendly laws

Yet another European country is moving forward with particular legislation and adopting cryptocurrency more. Following other countries like Portugal, Estonia, Spain, and France, the Czech Republic introduced new crypto-friendly laws that make operations easier for various crypto businesses.

These new laws in the country made headlines because such regulations can transform the sector^[1]. Changes in the regulations address the challenges that cryptocurrency businesses face. They could also make the European country a hotspot for digital asset innovations.

These laws include easier access to bank accounts for digital currency businesses and a three-year tax exception on particular crypto investments and transactions. The Czech Republic's particular reform aims to attract more such businesses and prevent them from moving to other European crypto-friendly countries.

The Czech government wants to exempt cryptocurrency held for three or more years from taxes

The country's prime minister said residents would not have to pay taxes on selling assets held for more than three years. Petr Fiala, prime minister of the Czech Republic, reported that the country is moving forward with the West.

On December 6th, Fiala posted on social media addressing the newest measure. The government, backed by Chamber of Deputies member Jiří Havránek, would "guarantee that if you hold cryptocurrencies for more than three years," all sales would be exempt from capital gains tax.

Also, according to the poster, taxpayers would not be required to report transactions valued at less than 100,000 koruna (roughly $4,200) per year. This means buying something casually like a coffee using Bitcoin would not be taxable^[2].

Lawmakers in the country claim that the Chamber of Deputies approved the law's time and value conditions. The move passed last week and will take effect on January 1, 2025.

Big break for cryptocurrency firms

This is the long-awaited move for businesses. Crypto companies in the Czech Republic have faced big challenges in opening bank accounts. Banks have been cautious about risks related to cryptocurrency and often refuse to provide basic banking services, making it difficult for crypto businesses to operate smoothly.

New reforms will change some things and make it easier for crypto companies to access banking services, removing a key obstacle to their growth. This shift could simplify business operations and attract more companies to the Czech Republic.

Deputy Speaker Jan Skopeček stressed the urgency of these changes, saying the government needed to act quickly. Without these reforms, many crypto firms might move to countries with more supportive rules, causing economic losses for the Czech Republic.

The push for change also relates to the European Union’s upcoming Markets in Crypto Assets (MiCA) regulation. MiCA aims to create standard crypto rules across the EU, but its rollout has created confusion. Some companies are still waiting for approvals, facing compliance issues, or even relocating to other countries.

The Czech Republic hopes to stand out as a crypto-friendly destination^[3] by improving banking access and offering tax benefits. Still, there are challenges ahead. While the reforms are a positive step, crypto companies may face unexpected difficulties as the new rules take effect. The next few months will show if the Czech Republic can truly position itself as a top spot for crypto businesses.