Czech Virtual Currency – Another Distribution step

The Czech virtual currency, Czech Crown Coin (officially named by the authors “CZC”) which started the distribution of the pre-mined CZC in August 2014, is distributing a next set of 100,000 CZC to the first 1,000 EU based individuals who have registered and obtained the so called “myID” via the official website of CZC. This should increase the amount of CZC in the circulation as well as to support its usage and importance on the global level.

As indicated by the CEO of CZC, the way how the Czech virtual currency is distributed to the public is rather unique. First of all, the actual release is free of charge. Furthermore, unlike other currencies, CZC is distributed via fully automated system (“myID”), i.e. without any manual inputs (such as checking electronic chips), which makes the distribution process more transparent.

However at the same time, the authors are trying to regulate the stability of the currency by releasing the pre-mined coins gradually. It is planned that the distribution is done in more steps, which should avoid the huge exchange rate fluctuation typical for crypto currencies. Nevertheless, only time will show whether the innovative approach taken by the authors of CZC will be successful and whether CZC will be profitable for the owners as well as for their authors in the longer time perspective.

On the level of the tax legislation, it is expected that the national legislators will need to react to this relatively new phenomenon of virtual currencies very soon also due to the fact that there were cases referred to the European Court of Justice (ECJ), questioning the VAT treatment of the various transactions considering the virtual currencies. We expect that we should have more clearance on this matter within next months during which the ECJ will hopefully deal with these cases.

Should you be interested in obtaining more information on CZC or other virtual currencies, please contact our subject matter specialist, Ms Petra Safkova at petra.safkova@ch.pwc.com.

About Andras Salanki

Manager PwC Switzerland email: andras.salanki@ch.pwc.com Office: +41587924536

Andras Salanki is an international VAT advisor with 7 years of relevant professional experience. He spent one year on secondment in California, US, where he advised US multinationals on global VAT projects and also gained experience with IT and Internet companies based in the Silicon Valley.