Spain Opposition Party Introduces Bill to Allow Mortgage Payments With Crypto

Partido Popular (PP), the leading opposition party in Spain, has introduced a bill that would allow for the payment of mortgages with cryptocurrencies and create a national crypto assets council to analyze the implications of the use of crypto and blockchain in that country. 

According to the text of the “Digital Transformation Law,” homeowners would be able to use cryptocurrencies to pay their mortgages, while the real estate sector would be able to use crypto to invest in mortgage pools. Banks, on the other hand, would be able to use blockchain as a system to manage mortgages and insurance, and streamline the payment of indemnities with digital currencies. 

According to the PP, the bill seeks to ensure that transactions with cryptocurrencies “are carried out in a framework of trust, security and transparency.”

According to lawyer Cristina Carrascosa, CEO of ATH21, a law firm specializing in crypto, this project is innovative as it is an implicit recognition of cryptocurrencies as a means of payment because of their debt-releasing capacity. 

So far, she added, banks do not accept payments in cryptocurrencies. 

Carrascosa added that in order for the law to be implemented, a change of legal category for cryptocurrencies would have to be made: from the current “means of exchange” status to “means of payment.” 

PP’s project, presented on July 26, also proposes the creation of a national crypto assets council (CNC) to serve on an advisory basis. It would be made up of representatives from the Directorate General of the Treasury, the National Securities Market Commission and the Spanish Central Bank. 

According to the proposal, the CNC will study and analyze the implications of the use of crypto assets and other services using blockchain, evaluate the introduction of blockchain in public administration and ensure the establishment of mechanisms to detect fraud and tax evasion.

The proposal adds that cryptocurrencies may be accepted as means of exchange between two parties, in the “fulfillment of private obligations, to the extent that they are freely agreed upon by the parties to the transaction as alternative, contractual and immediate methods of payment and are used for no other purpose than to serve as such.”

The bill clarifies that private obligations involving exchange of goods or services with cryptocurrencies will be subject to the same tax regime as monetary transactions, without prejudice to the tax liability that corresponds to the entities issuing cryptocurrencies or exchanges. 

According to Carrascosa, the use of cryptocurrencies as a means of exchange is currently permitted in Spain, following two rulings by the Court of Justice of the European Union in 2014, so the proposal’s provisions are not new. 

​​The draft also establishes that cryptocurrencies or tokens issued through initial coin offerings will be considered as negotiable securities, and that investments of less than €6,000 through ICOs will not have to be disclosed to the authorities.