Crypto Exodus? Tether CEO Blasts Italy's Shocking 42% Bitcoin Tax Proposal

Italy’s Bold Move on Crypto Taxation
Italy is set to increase the capital gains tax on Bitcoin and other cryptocurrencies to 42%, as announced by Deputy Finance Minister Maurizio Leo during a conference on October 16. He highlighted that as cryptocurrencies like Bitcoin gain popularity, the government expects this drastic increase from the current 26% tax rate.

"As this phenomenon (bitcoin) is spreading we expect the withholding tax to increase from 26% to 42%."

This proposed tax hike could position Italy among the countries with the highest crypto taxation globally. This move contradicts earlier commitments made by Prime Minister Giorgia Meloni, who had assured citizens there would be no broad tax hikes. Her comments were intended to avoid significant tax increases but appear to exclude niche sectors like crypto.

Prime Minister Meloni stated on X:

"As we promised, there will be no new taxes for citizens..."

Concerns from the Crypto Community
The announcement has sparked backlash from Italy’s crypto community, with many users contemplating leaving Italy for countries with more favorable tax environments, such as Dubai, which recently exempted all crypto transactions from VAT. Tether CEO Paolo Ardoino criticized the decision, sharing a meme that suggested a mass exodus of crypto users from Italy.

Ardoino sarcastically remarked:

"How dare [Italians] use Bitcoin as protection or a hedge against Italian financial policies."

Countries like India, which implemented heavy taxes on digital assets, have already seen trading volumes drop significantly as investors sought refuge in offshore platforms to escape high tax burdens. Will Italy face a similar fate with this new tax policy?

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.