Blockchain law passed in San Marino contains interesting aspect

On June 6, 2019, the Republic of San Marino approved the Blockchain Decree of the Republic of San Marino (Delegate Decree n. 86, dated May 23, 2019).

The Blockchain Decree provides a regulatory framework formulating specific rules for two different applications of Distributed Register Technology (Distributed Ledger Technology or – more commonly – Blockchain): investment tokens (digital tools allowing users to purchase tokens at an initial token offering in which a Blockchain entity has obtained a particular recognition and registered in a special register, according to the specific rules provided for the individual types of tokens) and utility tokens (i.e., token used for the purchase/access of goods or services offered by a Blockchain entity).

For tax and accounting purposes, the law chose to treat blockchains as follows:

  • Usage (utility) tokens are treated the same as foreign currencies; and
  • Investment tokens are treated the same as shares, financial instruments ,or debt securities of the issuer depending on the underlying instrument.

Francesca Giannoni-Crystal and Federica Romanelli

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