Unbacked Cryptomoney, Fiscal Evasion and Environment Tax: Some Policy Recommendations in Europe

Camille Boulanguer, Sarah Goldman, Maya Jandah and Tsvetelina Marinova
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Camille Boulanguer: CRIISEA - Centre de Recherche sur les Institutions, l'Industrie et les Systèmes Économiques d'Amiens - UR UPJV 3908 - UPJV - Université de Picardie Jules Verne
Sarah Goldman: Lux-SIR
Maya Jandah: CRIISEA - Centre de Recherche sur les Institutions, l'Industrie et les Systèmes Économiques d'Amiens - UR UPJV 3908 - UPJV - Université de Picardie Jules Verne
Tsvetelina Marinova: LEFMI - Laboratoire d’Économie, Finance, Management et Innovation - UR UPJV 4286 - UPJV - Université de Picardie Jules Verne, New Bulgarian University

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Abstract: In a 2019 New York Times article, Paul Krugman declared himself a "crypto skeptic" and shared his pessimistic predictions for cryptocurrencies. Nevertheless, unbacked cryptomoney is now very important in our societies and has revolutionized the monetary and financial landscape as exemplified by the increased pressure from competent regulators to monitor and regulate it. Cryptocurrencies are described by their high volatility that permits regulators to define them as non-safe financial assets when it comes to energy consumption. The anonymous property of cryptocurrencies opens the door to tax evasion, making it especially susceptible to avoiding environment-related taxes aimed at tackling negative impact of climate change. Against this background, the paper sets a twofold aim: to demonstrate that unbacked cryptomoney is volatile and it may pose a threat to financial and fiscal stability; and to develop the idea that, given their different degrees of anonymity and their decentralisation nature, cryptocurrencies could actively participate in the process of tax evasion and therefore incur high costs for countries. Given the general ecological condition and ensuing concerns, it is clear that avoiding eco-taxes represents a serious issue since money from eco-taxation could have been invested in environmental social and governance projects. Therefore, a clear and compelling legal framework should be implemented worldwide to reduce the tax evasion phenomena via cryptomoney channels.

Keywords: cryptomoney; regulation; tax evasion; environmental concerns; financial stability (search for similar items in EconPapers)
Date: 2024-07-03
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Published in Bulgarian Journal of International Economics and Politics, 2024, 4 (1), pp.3-22. ⟨10.37075/BJIEP.2024.1.01⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04639475

DOI: 10.37075/BJIEP.2024.1.01

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