Belgium Clarifies Cryptocurrency Status: Bitcoin and Ethereum Not Considered Securities

Regulatory Clarity amid Crypto Uncertainty

In a move that could ease the minds of Belgian crypto enthusiasts, the Financial Services and Markets Authority (FSMA) has officially stated that Bitcoin (BTC), Ether (ETH), and similar cryptocurrencies solely created by computer code are not classified as securities. This comes from a report released on November 22, drawing from inputs provided since July 2022.

Stepwise Plan and Its Implications

The FSMA’s revelations come as part of a broader attempt to clarify how existing laws apply to the ever-evolving world of digital assets. Although not legally binding under Belgian or EU law, the authority’s “stepwise plan” suggests that if there’s no identifiable issuer—like when a currency is spun out of a computer code—then regulations like the Prospectus Regulation and MiFID conduct do not apply.

The Catch: Payment Functions

It’s not a completely free pass, though. The FSMA has clarified that even if cryptocurrencies aren’t securities, they can still be subjected to other regulations if they are utilized as mediums of exchange. It’s like saying, “You can be a cool kid in school, but don’t forget you still need to follow the dress code at Friday’s dance.”

A Non-Binding Guideline until MiCA

The FSMA’s guidelines will serve as a temporary framework until the European Parliament rolls out the Markets in Crypto Assets Regulation (MiCA), which is anticipated to take effect in early 2024. So, while Belgium gets its regulatory ducks in a row, everyone else will be watching closely to see how this plays out across the continent.

The Bigger Picture

What’s particularly interesting is how Belgium’s approach stands in stark contrast to the regulation-heavy route pursued by the U.S. Securities Exchange Commission (SEC). As the SEC juggles definitions and tussles with the Commodity Futures Trading Commission (CFTC)—not to mention chairman Gary Gensler’s ever-changing views on BTC and ETH—it seems Belgium is playing a far more laid-back game of ping-pong, where ‘not a security’ is a win for the local crypto players.

The Belgian Crypto Landscape

Despite these regulatory clarities, Belgium hasn’t fully embraced the crypto wave just yet, sitting at a relatively low 94th in the Global Crypto Adoption Index, according to recent data from blockchain analysis platform Chainalysis. The country has access to only 10 cryptocurrency exchanges, which might explain why it hasn’t picked up the pace compared to other European nations.