Czech Republic Eliminates Capital Gains Tax on Long-Term Bitcoin Holdings
The Czech Republic has taken a major step toward crypto-friendly regulations by eliminating capital gains tax on Bitcoin (BTC) and other cryptocurrencies held for at least three years. President Petr Pavel has signed a law ensuring that individual investors engaging in non-business activities will no longer be taxed on their long-term crypto gains. The legislation, set to take effect in mid-2025, aligns the country’s regulatory framework with the European Union’s Markets in Crypto-Assets (MiCA) rules. Notably, the tax exemption will also apply retroactively to digital assets acquired before 2025, provided they meet the holding requirement.
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The move aims to promote Bitcoin adoption as a hedge against inflation, which remains above the central bank’s 2% target. Czech National Bank Governor Aleš Michl has highlighted excessive money supply as a key inflationary risk. By encouraging long-term Bitcoin investment, the government is offering citizens an alternative store of value amid economic uncertainty. Additionally, Czech policymakers plan to maintain strict monetary policies to prevent excessive borrowing by households, businesses, and the state.
The Czech Republic’s decision could have a wider impact across Europe, potentially influencing other nations to adopt similar tax-friendly policies. The global trend of Bitcoin adoption by governments is gaining traction, with 22 U.S. states already considering Bitcoin as a strategic reserve asset. Reports suggest that the U.S. government is exploring the creation of a sovereign wealth fund backed by Bitcoin, further legitimizing its role in financial markets.
Despite skepticism from European Central Bank (ECB) President Christine Lagarde, who claims Bitcoin’s fair value is zero, Czech officials, including Michl, see it differently. Bitcoin’s market capitalization has surpassed $2 trillion, proving its resilience and increasing relevance in global finance. With this new law, the Czech Republic is establishing itself as one of Europe’s most progressive nations in crypto regulation, paving the way for broader adoption and financial innovation.
Amelia is a senior writer at Blockiance, focusing on the cultural implications of NFTs and digital ownership. Holding a master’s in media studies, she combines her academic background with a passion for storytelling to explore how Web3 technologies reshape creative industries.
