Since the introduction of regulations governing the taxation of capital gains from cryptocurrencies in Italy, questions have lingered regarding the fiscal status of the stablecoin DAI. The initial law lacked clarity on this matter, and the subsequent European MiCA regulations only added to the confusion. Although the Agenzia delle Entrate had issued an official statement, it lacked legal authority, leaving many uncertainties unresolved. Recent developments, however, appear to have provided a definitive answer.
Clarification on Stablecoin DAI in Italy
To bring clarity to the situation, Giulio Centemero, a member of the Italian parliament, reached out to the Minister of Economy and Finance for explicit guidance on the taxation of capital gains stemming from cryptocurrency transactions involving stablecoins. DAI, also known as USDS, is a stablecoin linked to the US dollar, but it is not backed by USD reserves. Centemero’s inquiry specifically addressed the conversion of cryptocurrencies into stablecoins pegged to fiat currencies, distinguishing between e-money tokens (EMT) and asset-referenced tokens. This distinction is crucial, as the new European regulations categorize stablecoins into these subcategories, and while transactions involving e-money tokens are confirmed to have fiscal relevance, the status of asset-referenced tokens remained uncertain.
Official Response from the Minister
In his official response, the Minister clarified that exchanges between cryptocurrencies and asset-referenced tokens do not carry fiscal relevance. This effectively resolves the ambiguity surrounding the matter. The Minister explained that asset-referenced tokens are not classified as electronic money and lack the ability to be redeemed at face value. DAI, or USDS, is produced by the decentralized finance platform MakerDAO (now called Sky) and cannot be exchanged for USD at its nominal value. In contrast, collateralized stablecoins like USDT and USDC can be redeemed for dollars at par, which the Minister indicated as a key differentiator. He noted, “if the holder of the stablecoin does not have the right to redeem at nominal value from the issuer, the exchange of that stablecoin with a cryptocurrency does not constitute a taxable event.” This aligns with the legal framework stipulated in article 67, paragraph 1, letter c-sexies) of the TUIR, which states that “the exchange between crypto-assets with identical characteristics and functions does not constitute a fiscal event.”
Ongoing Questions Regarding USDT
While the clarification regarding DAI (USDS) is significant, the fiscal status of USDT (Tether) remains unresolved. USDT is classified as a USD-collateralized stablecoin, granting holders the right to redeem it at face value from the issuer. Users can convert USDT back into USD through platforms like Bitfinex, which is the primary market for these transactions. However, under European MiCA regulations, USDT is not classified as an e-money token since Tether is not registered as an e-money issuer in the EU. Thus, despite its redeemability at par with fiat, USDT is not recognized as electronic money according to current European regulations. Centemero’s inquiry focused specifically on asset-referenced tokens, leaving the fiscal implications of USDT in Italy still needing further clarification.
The Nature of DAI as an Algorithmic Stablecoin
DAI (or USDS) is categorized as an algorithmic stablecoin, maintaining a market value around $1 without being collateralized in fiat currency, but rather in cryptocurrencies such as Bitcoin and Ethereum. This structure introduces a greater risk of depegging; however, it is noteworthy that since 2021, DAI has managed to stay relatively stable against the US dollar. While holding DAI for the long term carries certain risks due to potential depegging, it can be considered safer for medium to short-term holding, provided one avoids keeping it during significant downturns in the crypto market. Nevertheless, a challenge arises: the new European regulations restrict exchanges from offering services for stablecoins that are not classified as e-money tokens, and many platforms have already begun limiting the availability of DAI. Starting in April, exchanges dealing with EU customers will likely remove trading pairs involving DAI, leaving it only convertible into USDC, other approved stablecoins, or fiat currency. As a result, users wishing to trade in DAI within the EU will need to resort to decentralized exchanges.
