Iceland is a small island state in northern Europe. The legal status of cryptocurrency here is unclear despite the great popularity of mining.
Country overview
#95
IcelandCountry stats
Rating Points
120
This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.
Crypto Penetration
0.9%
Estimated percentage of crypto users out of the country's total population based on public data.
Legal Entities
0
Number of crypto companies registered in the country based on regulator data if available or other types of public data.
Regulation Points
80
An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.
Amount of crypto users
2 700
Total amount of crypto users out of the country's total population based on public data.
Taxation points
15
This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.
Market volume points
0
A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.
Status of crypto
Legally allowed
General status of cryptocurrency regulation in this jurisdiction.
Crypto payments
No regulation
The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.
Security Level
Safe place
The overall level of security in a given country based on open data.
Crypto Salaries
No regulation
The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.
Business Climate
No info
Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.
Stablecoin Regulation
Low
This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.
Bad Factors
No
This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.
Types of licenses
Crypto-to-crypto
This license type allows VASP to provide legal exchange from one cryptocurrency to another.
Crypto-to-fiat
This type of license regulates the exchange from cryptocurrency to fiat.
Wallet/Custody
This country has a legal licensing procedure for companies that store cryptocurrency - - crypto wallet providers and custodians.
Good
Medium
Bad
Iceland has a safe place security level according to our rating. Jurisdiction has 75.0 points (from 100) for safety level in Numbeo crime rating (1). The homicide level (2) is 0.5 per 100,000 inhabitants a year. Level of firearm-related death (3) 0.07 per 100,000 inhabitants a year.
Crypto might be deemed (4) foreign exchange transactions between residents and non-residents without an intermediary in a financial undertaking, which would make it at least in theory prohibited. However, crypto transactions are de facto allowed in Iceland. The national central bank hasn’t said anything about the standing of cryptocurrencies under these restrictions and the government has never expressed the will to go after crypto users.
No regulation for crypto salaries in Iceland. However, they are de facto possible based on MiCA and EEA crypto regulation framework.
Surprisingly given the popularity of mining in the country the legal status of cryptocurrency there remains unclear. After the 2008 financial crisis (5), the Icelandic government adopted strict financial controls that could jeopardize the future of crypto. During the financial crisis, the Icelandic economy went bankrupt, forcing the government to realize controls on how citizens spend their money.
Laws were passed that stopped citizens from taking foreign money out of the economy to prevent it from collapsing. The regulation also performed as an indirect ban on BTC as it resulted in a big capital from the Icelandic economy. However, we would be more correct in stating that the use of Bitcoin was in a gray area. The ban was never applied to digital currencies so the regulation regarded crypto only on paper.
However, that changed in 2017. The Icelandic Central Bank (6) lifted the rule forbidding the outflow of foreign assets from the country. This essentially canceled the indirect ban on crypto as cross-national currency transfers are completely legal today. However, there are still limitations existing. For starters, investors are required to notify the Icelandic Central Bank
Iceland faces limited ML/TF risks from its small VASP sector but could potentially be exposed to increasing risks with the recent expansion in the scale of VASP activity. According to the authorities, the VASP sector in Iceland is tiny comprising three(7) VASPs serving an overwhelmingly domestic customer base.
The headline PIT rate is 31.8, plus municipal tax and the Headline CIT rate is 20% according to PWC taxsummaries (8). Corporate capital gains in Iceland are subject to the normal CIT rate (20%) based on PWC(8).
1)👉🏻Crime Index by Country 2023 Mid-Year
2)👉🏻List of countries by intentional homicide rate
3)👉🏻List of countries by firearm-related death rate
4)👉🏻Crypto In Iceland. Article
5)👉🏻2008–2011 Icelandic financial crisis. Wikipedia
6)👉🏻Minutes of the Financial Stability Committee meeting of December 2023. Article
7)👉🏻FINANCIAL SECTOR ASSESSMENT PROGRAM TECHNICAL NOTE ON ANTI-MONEY LAUNDERING/COMBATING THE FINANCING OF TERRORISM. PDF file
8)👉🏻PWC Taxsummaries. Iceland