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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