Patrick Hansen, Circle’s EU strategy and policy lead, says the bloc’s crypto tax revenue projections may fall short. The European Commission has modeled up to $23 billion across the 2028 to 2034 EU budget cycle.

Hansen argued that a transaction-based crypto tax would push users toward DeFi protocols. Self-custody wallets and non-EU venues would erode the centralized exchange volume Brussels expects to capture.

The leaked Commission services paper outlines two crypto tax models for member states to consider:

Crypto-asset service providers (CASPs) would act as collection and reporting points.

Combined, the two options could yield close to $23 billion across the seven-year EU budget. Officials acknowledge the figures depend on market volatility.

The paper signals that stablecoins used as payments would likely fall outside the transaction levy.

Capital gains taxation generally would not apply to dollar-pegged tokens either, given their minimal price movement.

Hansen pointed to three structural weaknesses in the modeling:

France has pushed hardest for new EU revenue sources. Crypto tax compliance burdens and resistance from exchange-heavy economies like Malta could harden opposition.

Users facing a centralized exchange levy can move activity to self-custody wallet options, DeFi protocols, or non-EU platforms. Any transaction tax depends on that volume.

“Any transaction-based crypto tax would likely accelerate migration towards non-taxed channels…and/or non-taxed assets…In practice, imo, that would significantly reduce the revenue potential on which these projections are based,” he stated.

Cyprus, which holds the rotating Council presidency, plans to share a revised budget proposal around June 10.

The outcome will signal whether crypto stays on the menu, and how it interacts with the bloc’s MiCA review consultation.

The post $23 Billion EU Crypto Tax Forecast Draws Pushback From Circle Policy Lead appeared first on BeInCrypto.

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