Quick Answer
Yes, cryptocurrency is legal but largely unregulated in Belgium.
- It is not considered legal tender or a valid payment method.
- Gains are taxed, and regulations are increasing for investor protection.
Legal Status of Crypto in Belgium
Cryptocurrency in Belgium operates within a legal gray area; while owning and trading digital assets is not illegal, they are not recognized as legal tender or a valid payment method. This ambiguous status stems from the absence of a single, comprehensive legal framework, forcing authorities to apply existing rules for taxation, accounting, and anti-money laundering on a case-by-case basis. Regulatory bodies like the Financial Services and Markets Authority (FSMA) and the National Bank of Belgium oversee the sector, enforcing compliance with regulations such as the Anti-Money Laundering Act, which mandates customer due diligence for service providers.
Current Regulations
Belgium lacks a single, comprehensive law for crypto, creating a patchwork of rules applied on a case-by-case basis. The FSMA classifies crypto-assets to determine if they fall under existing financial regulations and has the power to supervise how virtual currencies are advertised to retail investors. For tax purposes, gains are typically treated as miscellaneous income subject to a 33% tax, unless the activity is deemed professional or part of the normal management of private wealth. According to a 2021 opinion from the Accounting Standards Commission, cryptocurrencies should be classified as "other receivables" rather than cash investments.
Regulatory Authorities
Several key authorities are responsible for overseeing and enforcing the rules governing cryptocurrency in Belgium.
- Financial Services and Markets Authority (FSMA): The FSMA regulates financial markets and services, including crypto-asset providers like exchanges and wallet providers. It also supervises the advertising and commercialization of virtual currencies to protect retail investors from misleading information.
- National Bank of Belgium (NBB): The NBB supervises financial institutions to ensure they comply with anti-money laundering regulations and warns that crypto is not legal tender. It also manages the Central Contact Point, where individuals must declare foreign crypto accounts.
- Financial Intelligence Processing Unit (CTIF-CFI): As Belgium's financial intelligence unit, the CTIF-CFI receives and analyzes suspicious transaction reports from entities like crypto exchanges to detect illicit activity. It investigates potential money laundering and terrorist financing cases before referring them to law enforcement.
- Belgian Tax Authorities: These authorities, including the Special Tax Inspectorate (STI), are responsible for enforcing tax obligations on crypto-related income. They generally treat gains from cryptocurrency sales as 'miscellaneous income' subject to tax.
Historical Context
Belgium’s approach to crypto regulation has evolved from caution to active oversight. In 2014, authorities first issued warnings that virtual currencies were not legal tender. A significant policy shift began in 2020 when the FSMA called for formal regulation. In 2021, the Accounting Standards Commission clarified that crypto should be treated as 'other receivables' for accounting purposes. By July 2022, the FSMA gained new powers to supervise crypto advertising, enhancing consumer protection. More recently, proposed taxes on capital gains signal a move to end Belgium’s status as a crypto tax haven, aiming for greater transparency and legal certainty.
Compliance Requirements for Businesses in Belgium
Businesses in Belgium, particularly those in the financial sector, must adhere to a strict set of compliance rules designed to combat money laundering and terrorist financing. These obligations are rooted in the Belgian Anti-Money Laundering Act of 2017, which transposes EU directives into national law. The National Bank of Belgium provides detailed reference documents outlining these requirements. Key procedures include:
- AML & KYC Checks: Businesses must perform Customer Due Diligence (CDD) to verify a client's identity before establishing a relationship. This involves collecting identification documents, assessing the purpose of the relationship, and understanding the source of funds. For higher-risk clients, such as Politically Exposed Persons (PEPs), Enhanced Due Diligence (EDD) is mandatory.
- Suspicious Activity Reporting: If a transaction appears unusual or suspicious, firms are required to file a Suspicious Transaction Report (STR) with the Financial Intelligence Processing Unit (CTIF-CFI). This must be done immediately and without "tipping off" the customer.
- Record-Keeping: All records related to AML compliance—including customer identification data, transaction histories, and internal risk assessments—must be retained for at least 10 years after the business relationship ends.
- Internal Controls: Companies must establish robust internal AML policies, appoint a dedicated compliance officer (AMLCO), provide regular training to employees, and conduct independent audits to ensure their compliance framework is effective.
- Beneficial Ownership: A crucial part of AML compliance in Belgium is transparency regarding the Ultimate Beneficial Owner (UBO). Businesses are required to identify and register their UBOs in the national UBO Register and keep this information current.
Why this matters for Cross-Border Payments
For businesses managing cross-border payments between Belgium and India, these regulations introduce a dual layer of compliance complexity. Companies must navigate not only Belgium's stringent AML/KYC requirements but also India's own evolving crypto landscape, creating significant administrative overhead. This friction can lead to transaction delays, increased operational costs, and complex tax reporting, undermining the speed and efficiency that make crypto payments attractive. Consequently, these hurdles may deter businesses from using digital assets for international trade, pushing them back toward traditional financial channels.
How Lightspark Enables Compliant Crypto-Native Payments
Lightspark offers a global payments network, the Money Grid, built on Bitcoin to streamline money movement. It provides two key products: Lightspark Connect, which offers native access to the Lightning Network for crypto-savvy businesses, and Grid Switch, which bridges traditional finance by using domestic real-time payment systems. This dual approach enables instant, low-cost cross-border payments by converting local fiat into Bitcoin for settlement and back into fiat at the destination, effectively bypassing the delays and high costs of conventional channels.
These features directly address the friction in cross-border payments by replacing slow, fragmented systems with a unified, real-time network. For regulated institutions navigating complex rules, Lightspark provides tools to ease the compliance burden. Grid Switch allows firms to leverage familiar, regulated domestic payment rails for global transfers. Meanwhile, Lightspark Connect offers audit-ready reporting and flexible custody options, helping businesses maintain the necessary records and security protocols required by authorities like the FSMA.
To learn more about how Lightspark can modernize your cross-border payments, visit their website.
Notice: This article is provided for informational purposes only and does not constitute legal advice.
Sources
- Berger, Pierre E., and Nicolas Kalokyris. "Crypto-Assets Regulation in Belgium." DLA Piper, 2 Aug. 2022, www.dlapiper.com/insights/publications/2022/12/crypto-assets-regulation-in-belgium.
- Cabinet David Advocaten. "Belgium Clarifies Position on Cryptocurrencies and NFTs." Cabinet David Advocaten, www.david-law.be/news/belgium-clarifies-position-on-cryptocurrencies-and-nfts.
- Chetrit, Amelie. "Belgium Ends Crypto Tax Haven: What Investors Must Know." @O2K, 10 Feb. 2025, www.o2k.tech/blog/towards-the-end-of-belgiums-tax-haven-for-crypto-investors.
- "The Essentials of AML Compliance in Belgium." sanctions.io, 10 Feb. 2025, www.sanctions.io/blog/mastering-aml-compliance-in-belgium.
- Freeman Law. "Belgium and Cryptocurrency." Freeman Law, 2022, freemanlaw.com/cryptocurrency/belgium-and-cryptocurrency/.
- Ghazaryan, Artyom. "Are Cryptocurrencies Taxed in Belgium?" Accountable, 6 Feb. 2025, www.accountable.eu/en-be/blog/tax-on-cryptocurrencies-belgium/.
- National Bank of Belgium. "Main Reference Documents." National Bank of Belgium, www.nbb.be/en/financial-oversight/combating-money-laundering-and-financing-terrorism/information-and-19.
