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$23 Billion EU Crypto Tax Forecast Draws Pushback From Circle Policy Lead

Patrick Hansen, who leads EU strategy and policy at Circle, believes the European Union might not collect as much tax revenue from crypto as it expects. The European Commission currently estimates potential revenue of up to $23 billion between 2028 and 2034.

Hansen believes that taxing crypto transactions in the traditional way could drive users to decentralized finance (DeFi) platforms. He suggests that people might move their crypto to self-custody wallets or exchanges outside the EU, which would reduce the amount of trading happening on the centralized exchanges that Brussels is hoping to regulate.

What the Commission’s Proposal Includes

The leaked Commission services paper outlines two crypto tax models for member states to consider:

  • A 0.1% levy on the value of crypto transactions could generate $3.5 billion to $4.7 billion per year.

Crypto-asset service providers (CASPs) would act as collection and reporting points.

  • A separate capital gains tax on realized crypto profits would raise an estimated $1.2 billion to $2.8 billion annually.

These two options together could generate nearly $23 billion over the next seven years of the EU budget. However, officials note that the exact amount will likely fluctuate with market conditions.

The paper signals that stablecoins used as payments would likely fall outside the transaction levy.

Because dollar-pegged tokens don’t usually change in price much, taxes on capital gains typically wouldn’t apply to them.

Why Hansen Thinks the Forecast Misses

  • The proposal also requires unanimous Council approval and a harmonized EU tax base.

France has been the strongest advocate for finding new ways for the EU to generate income. However, the challenges of tracking taxes on cryptocurrencies and pushback from countries that rely heavily on cryptocurrency exchanges, like Malta, could make it harder to reach an agreement.

  • The behavioral risk looms largest, according to Hansen.

People affected by the new tax on centralized exchanges can consider using self-custody wallets, decentralized finance (DeFi) platforms, or exchanges based outside the EU. The amount of tax charged will depend on how much trading activity occurs.

He believes that taxing every cryptocurrency transaction could push people towards using platforms and assets that aren’t taxed. This, in his opinion, would ultimately decrease the amount of tax revenue the government could collect, making current revenue predictions unrealistic.

Cyprus, currently leading the Council, intends to circulate an updated budget plan around June 10th.

The result will show if cryptocurrency remains a viable option, and how it will be considered during the European Union’s review of its MiCA regulations.

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2026-05-30 20:56