Publications or official statements from the Federal Reserve Bank of Minneapolis

ECB and Minneapolis Fed Propose Bitcoin Tax or Ban Amid Deficit Concerns and Impact on Non-Holders

Oct 20, 2024, 10:37 PM

The European Central Bank (ECB) has recently intensified its stance against Bitcoin, proposing measures that could include higher capital gains taxes in Italy and an exit tax in the Netherlands. Reports suggest that in the United Kingdom, individuals who made money through cryptocurrency might face challenges obtaining mortgages. This shift comes after the ECB previously declared Bitcoin "dead" and "on the road to irrelevance." An ECB paper has been perceived as a declaration of war on Bitcoin, indicating that the central bank considers Bitcoin a threat to non-holders and suggesting that it could impoverish those who do not own the cryptocurrency. Similarly, a research paper from the Federal Reserve Bank of Minneapolis has proposed that taxing or banning Bitcoin may help governments maintain permanent budget deficits. The paper states that "a legal prohibition against bitcoin can restore unique implementation of permanent primary deficits," highlighting concerns over managing the U.S. national debt, which has reached $35.7 trillion with a yearly primary deficit of $1.8 trillion. Central banks' changing arguments against Bitcoin reflect growing concerns over its impact on monetary policy and wealth distribution.