Croatia and Cryptocurrency

Croatia Cryptocurrency Laws
Regulation of Digital Currencies: Cryptocurrency, Bitcoins, Blockchain Technology

In Croatia, virtual currencies are defined as “a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency, and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically.” Since “virtual currency” is a synonym for “cryptocurrency,” the Croatian government has implicitly provided cryptocurrencies with a legal definition.

Despite providing a legal definition, the Croatian government’s restrictive regulations display the state’s skepticism of the new technology. In 2017, the National Bank of Croatia (CNB) emphasized that cryptocurrencies are not considered a legal means of payment, nor are they recognized as foreign currency or foreign payment instruments. Also, Croatia’s Financial Stability Council informed the public that Croatian regulators are not responsible for overseeing virtual currency transactions.

The fact that the Croatian government does not regulate cryptocurrency raises two considerations. First, Croatian authorities do not issue licenses to cryptocurrency firms. So, any firms that facilitate cryptocurrency transactions within the country are not licensed by the state. Second, Croatian agencies are not authorized to supervise the quality of services provided by these unlicensed firms. Consequently, cryptocurrency firms in Croatia are likely unlicensed, and the quality of service that these firms provide are mostly unregulated by the Croatian government.

Despite being mostly unregulated, Croatia does regulate cryptocurrencies through its anti-money laundering regulations. Specifically, the Cro-AMLA regulations cover two types of cryptocurrency enterprises: “providers engaged in exchange services between virtual currencies and fiat currency” and “wallet providers.” Wallet providers are defined as “a legal or natural person that provides services to safeguard private cryptographic keys on behalf of its customers, to hold, store and transfer virtual currencies.” In other words, cryptocurrency wallets are internet sites or cellphone apps that allow users to store their virtual currency tokens. One prominent example is Coinbase. Due to AML regulations, cryptocurrency investors in Croatia are not left wholly unprotected. However, since the AMLA regulations only cover two types of cryptocurrency enterprises, many cryptocurrency enterprises like mining operations fall outside Croatia’s AMLA legislation’s statutory bounds.

Croatian authorities have also highlighted the risks of investing in cryptocurrencies. In 2017, the CNB informed the public that cryptocurrencies are high-risk investments because they have a highly volatile exchange rate. Additionally, Croatia’s Financial Stability Council expressed that cryptocurrency investments pose substantial risks, such as digital wallet theft, transaction misuse, and fraud. They further warned that investors are charged with the sole responsibility for losses resulting from cryptocurrency transactions. As stated above, overseeing cryptocurrency transactions is not the responsibility of the Croatian government.

Furthermore, Croatia’s Financial Stability Council also warned that cryptocurrency holders must be aware of the possible tax consequences resulting from their cryptocurrency transactions:

  1. Cryptocurrency investors must be aware that cryptocurrency trading is considered a “financial transaction” in Croatia.
  2. Income resulting from cryptocurrency sales are subject to a personal income tax based on capital gains. Croatia residents are taxed at 12%, while Zagreb residents are taxed at an 18% rate.
  3. Cryptocurrency holders are required to document their transactions according to the FIFO method of consecutive prices.

In sum, the Croatian government has charged Croatian residents with knowledge of the above tax consequences stemming from cryptocurrency investments.

P.S. Insights on Cryptocurrency Legal Issues

Most jurisdictions and authorities have yet to enact laws governing cryptocurrencies, meaning that, for most countries, the legality of crypto mining remains unclear.

Under the Financial Crimes Enforcement Network (FinCEN), crypto miners are considered money transmitters, so they may be subject to the laws that govern that activity. In Israel, for instance, crypto mining is treated as a business and is subject to corporate income tax. In India and elsewhere, regulatory uncertainty persists, although Canada and the United States are relatively friendly to crypto mining.

However, apart from jurisdictions that have specifically banned cryptocurrency-related activities, very few countries prohibit crypto mining.

Our Freeman Law Cryptocurrency Law Resource page provides a summary of the legal status of cryptocurrency for each country across the globe with statutory or regulatory provisions governing cryptocurrency.  The globe below provides links to country-by-country summaries:

The Freeman Law Project – Cryptocurrency Regulation and Taxation: A Brief Primer

Is cryptocurrency legal in Croatia?

Do you have questions about cryptocurrency, digital currencies, or blockchain technology?
Freeman Law can help with digital currencies, tax planning, and tax compliance.  Contact us now to schedule a consultation or call (214) 984-3410 to discuss your cryptocurrency and blockchain technology concerns.


Lukas Krainz. (2020, August 10). Taxes on cryptocurrencies like Bitcoin in Croatia. Taxes on Cryptocurrencies like Bitcoin in Croatia; Blockpit GmbH.

Regulation of Cryptocurrency Around the World. (2014).

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