The ever-increasing spread of cryptocurrencies and other virtual digital assets also in our country has forced jurists to review the traditional instruments of protection. While crypto-assets were for years considered a niche technological phenomenon, which jurisprudence did not even take an interest in, today they are gaining more and more space in the global digital economy and need to be precisely framed not only from a financial point of view, but also from a legal one.
The definitions of jurisprudence
The first legal definitions of cryptocurrency, at a unified level, are due to the European Parliament in Strasbourg. They emerge with the European Union Directive 2018/843. It is the first official document qualifying cryptocurrencies as digital representations of value. Subsequently, the EU Regulation 2023/1114, which we know better by the acronym MiCA, introduced an organic classification of asset-referenced tokens; e-money tokens and other differently specified crypto-assets, officially recognising their relevance as digital economic goods.
At the Italian level, we have aligned ourselves with the European legislation. In our country, the Legislative Decree 231 of 2007, on anti-money laundering, transposed the European definition in one of its subsequent updates and assigned identification and tracking obligations to exchanges. The Internal Revenue Service, in answers number 14/2018 and 788/2021, assimilated cryptocurrencies to foreign currencies for tax purposes. Strange as this decision may seem, it must be credited with one important merit: it attested to the asset's capital nature.
What role do cryptocurrencies play in the economy
To find a place for cryptos in the articulated space of jurisdiction, one must consider the three functions they perform:
- they are a means of economic exchange and transaction, as evidenced by the prevalence of payments made in cryptocurrency;
- they represent an investment asset, relevant for the purposes of taxes on accrued capital gains;
- they play the role of a digital store of value, recordable in the balance sheet as income from intangible assets.
To trace back to the first time in which European jurisprudence recognised the economic role of cryptocurrencies, one has to go back as far as the judgement Skatteverket v. Hedqvist, issued by the European Court of Justice on 22 October 2015 ( protocol C-264/14). On that occasion, the Bitcoin versus currency exchange was judged as a VAT-exempt supply of services. The Court framed the exchange transactions from current currency to crypto and vice versa as supplies of services relating to liquid money, i.e. coins and banknotes, excluding the application of value added tax.
The qualification as legal asset in Budget Law
The Italian Budget Law of 2023 contains a definition of virtual digital asset that has not been changed since. The legislator has established that crypto-assets are intangible assets, susceptible to economic valuation.
Recognition of cryptocurrencies as intangible legal assets requires lawyers to be professionally updated on the subject. These assets are already a stable component of the assets of natural persons; of companies and entities. Establishing their legal regime was a step that modern legal practice could no longer postpone. The new European regulations included in the MiCA and the answers given by the Internal Revenue Service have provided the jurisprudence with the necessary tools to express an opinion on cryptocurrencies and give them a delineation that can be challenged in the courts.
Internationally, however, one has to go to India to find the most recent definition of cryptocurrency issued by a court: the Madras High Court qualified cryptocurrency as property (the word used was property) for the purposes of precautionary measures. The Indian orientation is thus not entirely superimposable on the European one, but it is in line with the Brussels tendency to consider cryptocurrency an economic good in digital form.
