Luxembourg vs Palau
Crypto regulation comparison
Luxembourg
Palau
Legal
Legal
Luxembourg is a major European hub for crypto and blockchain financial services. The CSSF regulates VASPs and crypto-related investment funds. Crypto held for more than 6 months is generally exempt from capital gains tax for individuals, making it attractive for long-term holders. Luxembourg hosts several prominent crypto exchanges and fund administrators.
Palau has explored blockchain technology and launched a stablecoin program in partnership with Ripple. No income or capital gains tax.
Tax Type
Capital gains
Tax Type
No tax
Tax Rate
0-42%
Tax Rate
0%
Exchanges
Yes
Exchanges
Yes
Mining
Yes
Mining
Yes
Regulator
CSSF (Commission de Surveillance du Secteur Financier)
Regulator
Financial Institutions Commission
Stablecoin Rules
Regulated under EU MiCA framework; Luxembourg hosts major stablecoin issuers
Stablecoin Rules
No specific stablecoin regulation
Key Points
- CSSF oversees VASPs under the Luxembourg AML/CFT framework
- Individuals holding crypto for 6+ months are generally exempt from capital gains tax
- Short-term gains taxed at progressive income tax rates up to 42%
- Major hub for crypto investment funds and blockchain companies
- MiCA framework fully applicable from December 2024
Key Points
- Exploring national stablecoin in partnership with Ripple
- No income or capital gains tax
- Uses the US dollar as official currency
- Small but forward-looking approach to digital assets
- Limited domestic crypto infrastructure