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Luxembourg vs El Salvador

Crypto regulation comparison

← Back to map | Luxembourg | El Salvador
Luxembourg

Luxembourg

El Salvador

El Salvador

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.

El Salvador made history in September 2021 by becoming the first country to adopt Bitcoin as legal tender through the Bitcoin Law. However, under a January 2025 IMF agreement (Decreto 199), El Salvador amended the law to make Bitcoin acceptance by businesses voluntary rather than mandatory, and repealed several articles. There is no capital gains tax on Bitcoin. The CNAD regulates digital assets.

Tax Type Capital gains
Tax Type No tax
Tax Rate 0-42%
Tax Rate 0%
Exchanges Yes Yes
Exchanges Yes Yes
Mining Yes Yes
Mining Yes Yes
Regulator CSSF (Commission de Surveillance du Secteur Financier)
Regulator BCR (Banco Central de Reserva), CNAD (Comisión Nacional de Activos Digitales)
Stablecoin Rules Regulated under EU MiCA framework; Luxembourg hosts major stablecoin issuers
Stablecoin Rules USD is the primary currency; Bitcoin-specific legislation in place
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
  • First country to adopt Bitcoin as legal tender in September 2021 via the Bitcoin Law
  • Government developed the Chivo wallet for citizens, offering $30 USD in BTC incentive
  • January 2025 Decreto 199 made merchant Bitcoin acceptance voluntary (IMF condition)
  • No capital gains tax on Bitcoin transactions for individuals
  • Government has been accumulating Bitcoin reserves and launched Bitcoin-backed bonds
Sources
Sources