Regolamentare Bitcoin? | Paolo Burlone | TEDxBariSalon
The speaker, an accountant, argues that the law must evolve to accommodate Bitcoin's revolutionary status as a means of payment rather than attempting to regulate it with outdated tax and anti-money laundering procedures. The technology's key feature is that transactions are publicly and immutably recorded on a blockchain, something far superior to traditional, opaque financial controls. Ultimately, the speaker warns that stifling Bitcoin's growth through overzealous legislation will prevent economic opportunities in an increasingly "liquid world." ## Speakers & Context - Speaker: Accountant who self-describes as "an accountant, and with a bad subject." - Topic Context: Discussion surrounding the tax implications of digital currencies like Bitcoin in Italy. - Occasion: A presentation where the speaker discusses tax law against the backdrop of developing payment technologies. ## Theses & Positions - The primary thesis is that the law must adapt to technology rather than trying to impede it; the legislation "must not hinder" the activity. - Bitcoin is fundamentally a "means of payment," possessing a characteristic that allows it to function as currency, unlike mere credit or a commodity. - Attempts by legislators to force compliance, such as requiring anti-money laundering (AML) filings for Bitcoin transactions (e.g., at a baker's), are incompatible with the technology's nature and will stifle its adoption. - The most subtle form of taxation that exists is double taxation. - The law can only "set some limits"; attempting to legislate beyond legality is impossible. ## Concepts & Definitions - **Blockchain:** The technology underlying Bitcoin, characterized by writing transactions on a public, checkable block. - **Means of Payment:** A category under which Bitcoin is argued to fall, distinct from a mere commodity, loan, or title. - **Fiat currency:** Legal tender currency, whose monetary creation is regulated by the central bank. - **Double taxation:** Described as the most subtle form of taxation that exists. - **Anti-money laundering (AML) legislation:** Legislation designed to monitor financial flows to ensure they do not fund illicit markets or terrorism financing. - **Intermediation operation:** The activity of setting up an exchange to facilitate transactions between fiat currency and Bitcoin. ## Mechanisms & Processes - **Bitcoin Mining:** Nodes participate by verifying proposed transactions and solving a problem at the basis of each block to validate transactions; success earns remuneration in Bitcoin. - **Income Categorization in Italy:** Income is categorized based on three elements: 1) the type of person (natural or legal), 2) the activity (subject in business or employed), and 3) the object (goods, services, or money). - **AML Monitoring (Traditional Banking):** In a traditional bank system, transactions and the parties involved are known, with the bank acting as a trustee of data that authorities can access. - **Public Address Linkage (Bitcoin):** Association between a public Bitcoin address and a subject requires forensic activity (connecting an IP address to the public address). ## Timeline & Sequence - **2013:** Year when the speaker's friend visited him in London. - **2014:** Year the European Court of Justice (ECJ) ruled on VAT matters. - **2015:** Year the ECJ sentence was published. - **2016:** Year the Revenue Agency was expected to rule on Bitcoin. - **2017:** Year used in a hypothetical tax calculation involving ten coins. - **June 2018:** Date specified for hypothetical tax payments (Article 956 bara 39 of 2018). - **31 December 2000:** Date used in a tax calculation comparison. ## Named Entities - **European Union:** Governing body responsible for coordinating currency and VAT rules. - **ECB (European Central Bank):** The central bank within the European Union. - **Bank of Italy:** Financial institution relevant to anti-money laundering legislation. - **Revenue Agency (Italian):** Tax authority expected to rule on Bitcoin. - **Italian legislator:** The body responsible for updating tax and financial laws. - **European Court of Justice (ECJ):** Court that rules on matters like VAT, issuing binding judgments for all EU members. - **Court of Cassation, United Sections:** Issued a ruling stating that two previous rulings by the Revenue Agency were "waste paper and have no legal value." ## Numbers & Data - **500 euros:** Amount given to the friend for a ticket to London. - **Article 956 bara 39 of 2018:** A specific ruling from the Lombardy regional directorate. - **90 to 94 (Articles):** Article range from 2000 concerning the internet. - **5th directive:** European directive defining virtual currencies. ## Examples & Cases - **Friend's Migration:** A friend was sent by his father with 500 euros to London to learn "to live, learn to be in the world, and learn to be in the world." - **Bitcoin Mining Origin:** The friend started mining after his laptop was stolen, using his internet connection. - **Historical Currency Example:** Cigarettes were used as currency in concentration camps, demonstrating goods taking on a function beyond their main purpose. - **First Crypto Failure:** A collapse of crypto exchanges where the friend held bitcoins, resulting in uncollected income and massive losses. - **Tax Calculation Example (2017):** Calculating profit on ten bitcoins in 2017, resulting in a potential tax liability of 165 thousand euros, payable in June 2018. - **Tax Calculation Comparison:** Comparing the tax treatment on 31 December 2000 versus June 2018 when Bitcoin values fluctuate, highlighting the difficulty of valuing assets subject to continuous market evaluation. - **Lombardy Ruling:** The ruling mentioned in Article 956 bara 39 of 2018 is deemed invalid by the Court of Cassation. ## Trade-offs & Alternatives - **Bitcoin use:** Using Bitcoin directly as payment vs. immediately selling it for Euros to cover tax debts. - **Legal Status Debate:** Treating Bitcoin like a foreign currency (an analogy challenged by legal precedent) versus adhering to the EU's 5th directive, which states it lacks the legal status of a desired currency. - **AML Scope:** Comparing the ability to file AML documentation when buying tires (a simple, acknowledged transaction) versus forcing the filing when accepting Bitcoin at a baker's. ## Counterarguments & Caveats - The speaker initially questioned tax compliance, stating, "If it were up to me, he would n't pay the taxes." - The friend’s initial attempt to explain the process of validating blocks was "absolutely Arabic." - The EU's 5th directive clearly states that virtual currencies "do not possess the legal status of desired currency." - The Italian implementation proposal attempts to "delete that phrase not possessing the legal status of desired currency," which is deemed a significant overreach. ## Methodology - Analysis relies on reviewing consolidated tax law and consolidated VAT law. - The speaker draws heavily on jurisprudence from the European Court of Justice and the Court of Cassation to interpret the legal status of digital assets. - Performing a conceptual analysis by comparing Bitcoin's function against established payment methods (currency, loan, title, barter). ## References Cited - Consolidated tax law. - Consolidated VAT law. - European Court of Justice (case C 264 of 2014). - Article 956 bara 39 of 2018 (Lombardy regional directorate ruling). - Court of Cassation, United Sections (ruling cited). ## Conclusions & Recommendations - The legislator must create a "terrain that must not hinder" the flow of liquid technologies, but must adapt to them. - The law needs to understand the technical reality of Bitcoin rather than imposing outdated bureaucratic models. - The ultimate plea is that lawmakers should cease trying to control the technology and instead focus on adapting regulation. - Final warning: "We will say no dear legislator, we cannot go on like this." ## Implications & Consequences - If the VAT system incorrectly rules that VAT applies to Bitcoin, it could cause half of all blogging activity in Europe to cease developing. - Forcing AML compliance onto everyday transactions undermines the core utility of decentralized digital currency. - The inability of the Italian subject to adapt to the "liquid world" means the country risks falling behind in the global technological race. ## Open Questions - What is the proper tax classification for activities involving cryptocurrencies accepted for payment? - How can the Italian legislator reconcile the need for AML compliance with the borderless, peer-to-peer nature of digital transactions without stifling innovation? ## Verbatim Moments - *"I'm an accountant, an accountant, and with a bad subject, from whom you go when you have to do what to do that thing, certain, certain as death, exactly, paying taxes."* - *"I don't mind, dad, my bed, you stay there Because he has to learn the language, learn to live, learn to be in the world, and learn to be in the world."* - *"Bitcoin is nothing other than the result of the activity of the subjects who participate in the bitcoin network, such as nodes that take the trouble to verify all the transactions that are proposed to the protocol."* - *"In Italy, income categories are applied based on two fundamental subjective characteristics, namely the type of person who carries out the activity: a natural person or a legal person, a subject in business activity, or a person who carries out an employed or similar job."* - *"What is the singularity of bitcoin that can only be used exclusively as a means of payment?"* - *"The revolution of bitcoin is that the transaction is written on a block that can still be checked."* - *"The law must consciously do? The only thing it can do is set some limits."* - *"We will say no dear legislator, we cannot go on like this."*