Bulgarien

Disclaimer: The regulatory information provided below is for general informational purposes only and may not reflect the most current legal developments. Cryptocurrency regulations are rapidly evolving and can change frequently. This information should not be considered legal or tax advice. Before making any business or investment decisions, please consult with qualified legal, tax, or financial professionals familiar with your specific jurisdiction and circumstances. Always verify current regulations with official government sources and regulatory bodies.

Legal Classification & Regulatory Framework

Cryptocurrency Status

Bulgaria, as a member of the European Union, has aligned its cryptocurrency regulatory framework with the EU’s Markets in Crypto-Assets Regulation (MiCA). The country adopted its Markets in Crypto-Assets Act (BG MiCA), which provides comprehensive legal definitions and classifications for digital assets.

Under this framework, crypto-assets are classified into three main categories aligned with MiCA: asset-referenced tokens (ARTs), electronic money tokens (EMTs), and other crypto-assets. Virtual assets are digital representations of value that can be traded, transferred, and used for payment or investment. Cryptocurrencies like Bitcoin and Ethereum fall within this regulatory scope and are treated as financial assets for tax and regulatory purposes.

It is important to note that cryptocurrencies are not considered legal tender in Bulgaria, nor do they fall under the traditional definition of financial instruments unless they exhibit specific characteristics such as revenue sharing or derivative features. In such cases, they may additionally fall under the Securities and Investment Business Act. Bulgarian courts have recognized cryptocurrencies as property, providing legal protections against fraud, theft, and insolvency proceedings.

Tax Treatment

Bulgaria offers one of the most competitive tax environments for cryptocurrency activities within the European Union. Income from cryptocurrency transactions is treated the same as income from the sale of financial assets and is subject to taxation under Bulgarian tax law.

For individuals, profits from cryptocurrency trading, selling, or exchanging are taxed at a flat rate of 10% personal income tax. This applies to capital gains calculated as the difference between the acquisition price and the sale price for each transaction. Crypto losses can be offset against crypto gains or other taxable gains on financial assets within the same calendar year. Holdings of crypto assets themselves are not subject to declaration unless sold or exchanged.

For corporations, cryptocurrency gains are included in the corporate tax base and subject to the standard corporate income tax rate of 10%, which is among the lowest in Europe. The sale or exchange of cryptocurrencies is generally exempt from Value Added Tax (VAT), in line with the European Court of Justice ruling on cryptocurrency exchanges. However, certain services, such as mining operations or wallet provision, may be subject to VAT depending on their specific characteristics.

When cryptocurrency transactions qualify as commercial activity based on professional, regular engagement for profit, the National Revenue Agency may apply the standard 15% self-employment tax rate instead of the 10% capital gains rate. Annual tax returns must be filed by the end of April following the tax year, with cryptocurrency gains declared in Schedule No. 5 of the personal income tax return.

Regulatory Oversight

Bulgaria has established a dual regulatory structure for cryptocurrency oversight. The Financial Supervision Commission (FSC) is the primary competent authority for most crypto-asset service providers (CASPs), overseeing licensing, supervision, and enforcement for exchanges, custodial services, and other virtual asset businesses. The Bulgarian National Bank (BNB) oversees issuers of electronic money tokens (EMTs), including e-money stablecoins.

The FSC maintains a public register of licensed crypto-asset service providers and issuers, which was transferred from the National Revenue Agency following the implementation of the BG MiCA Act. The Commission coordinates with the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) on cross-border supervision matters.

All CASPs operating in Bulgaria must comply with comprehensive Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) requirements under the Measures Against Money Laundering Act (MAMLA). This includes implementing robust Know Your Customer (KYC) procedures, monitoring transactions, reporting suspicious activity, and maintaining detailed records. The Regulation on Digital Operational Resilience (DORA) also applies to crypto-asset service providers, requiring them to maintain strong cybersecurity and operational resilience frameworks.

Business Environment

Banking Relationships

The banking environment for cryptocurrency businesses in Bulgaria reflects the broader European trend of cautious engagement. Bulgarian banks, like their counterparts across the EU, have historically maintained a conservative approach toward cryptocurrency companies. However, this is gradually evolving with the implementation of clearer regulatory frameworks under MiCA.

Licensed CASPs operating under the BG MiCA Act may find it somewhat easier to establish banking relationships due to their regulated status and the legal clarity provided by MiCA compliance. However, individual banks retain discretion over their risk appetite, and some may still impose additional due diligence requirements or restrictions on cryptocurrency-related businesses.

The Bulgarian National Bank has taken a measured approach to cryptocurrency developments, issuing guidance to ensure financial stability while monitoring the evolving digital asset landscape. The banking sector in Bulgaria is undergoing a digital transformation, with increased adoption of fintech solutions that may facilitate the integration of compliant crypto businesses over time.

Licensing Requirements

Under the BG MiCA Act, any entity wishing to provide crypto-asset services in Bulgaria must obtain a license from the Financial Supervision Commission. The licensing framework is tiered based on the services provided and the associated risk levels.

License fees are structured in three classes: Class 1 at approximately EUR 2,500, Class 2 at approximately EUR 5,000, and Class 3 at approximately EUR 15,000. Additional fees apply to public offerings and trading platform admissions for asset-referenced tokens, at approximately EUR 12,500. Minimum capital requirements under MiCA range from EUR 50,000 to EUR 150,000, depending on the services offered or on one quarter of the fixed overheads from the preceding year, whichever is higher, and are reviewed annually.

The licensing process requires comprehensive documentation, including organizational structure with clear governance roles, fit and proper assessments for management and key function holders, AML/KYC policies and procedures, business continuity and disaster recovery plans, cybersecurity frameworks with demonstrated operational resilience, and detailed business plans covering target markets and development strategy.

A transitional grandfathering period extends until July 2026, allowing entities that were registered in the National Revenue Agency’s AML register before December 2024 to continue operating while they complete the whole licensing process. The FSC must issue or refuse a CASP license within the timeframes established under MiCA, with the total licensing process expected to take between four and nine months.

Innovation Support

Bulgaria has demonstrated support for fintech and blockchain innovation through various initiatives. The Financial Supervision Commission has established an Innovation Hub to facilitate communication between fintech companies and the regulator, enabling discussions about innovative technologies in the non-banking financial sector.

While Bulgaria does not operate a dedicated national regulatory sandbox in the traditional sense, the FSC has actively promoted participation in the European Blockchain Sandbox, encouraging Bulgarian fintech companies to apply for testing innovative products utilizing distributed ledger technology, artificial intelligence, and Internet of Things applications.

The Bulgarian Fintech Association plays a significant role in supporting the sector, uniting over 150 fintech companies and stakeholders to promote industry development, improve financial literacy, and foster innovation. The Association partners with academic institutions, including Sofia University and VUZF, to deliver specialized master’s programs in fintech, blockchain, and digital transformation.

The Bulgarian Stock Exchange has shown openness to digital assets by launching exchange-traded notes (ETNs) based on Bitcoin and Ethereum, providing retail and institutional investors with regulated access to crypto exposure through traditional market infrastructure.

Market Characteristics

Adoption Patterns

Bulgaria has developed an active cryptocurrency community with an estimated participant base that includes both retail investors and an emerging institutional presence. The major cities of Sofia, Plovdiv, and Varna serve as the primary hubs for blockchain and cryptocurrency activity, hosting regular meetups, conferences, and educational events.

Consumer adoption has been facilitated by the country’s strong digital connectivity and relatively high internet penetration rates. Mobile banking, contactless payments, and e-wallets have become commonplace, creating a digitally literate population receptive to cryptocurrency adoption. Digital payments dominate Bulgaria’s fintech market, followed by enterprise technology providers and digital asset exchanges.

Institutional interest has grown with the availability of regulated investment products and clearer regulatory frameworks. The introduction of crypto-related ETNs on the Bulgarian Stock Exchange marked a significant step toward mainstream integration of digital assets into the financial market.

Industry Focus

Bulgaria’s cryptocurrency industry exhibits particular strengths in several areas. The country has established itself as a competitive location for cryptocurrency exchanges, wallet providers, and payment solutions, benefiting from its favorable tax environment and skilled technical workforce.

The fintech sector, which encompasses many crypto-related businesses, has experienced significant growth, with digital payments representing the largest segment. Enterprise technology providers serving the blockchain industry have also flourished, offering solutions for compliance, security, and infrastructure.

Sofia has emerged as a regional hub for blockchain development and cryptocurrency startups, attracting both local entrepreneurs and international companies seeking to establish a presence in Southeast Europe. The combination of lower operating costs than Western European centers, a strong pool of IT talent, and EU membership makes Bulgaria an attractive base for crypto businesses targeting the European market.

Regulatory Evolution

Bulgaria’s cryptocurrency regulatory landscape has evolved significantly in recent years, transitioning from a minimal regulatory approach primarily focused on AML compliance to a comprehensive framework aligned with EU standards. The adoption of the BG MiCA Act marks the country’s first dedicated legislation for the crypto sector, providing legal certainty for businesses and investor protections.

As an EU member state, Bulgaria benefits from MiCA’s passporting provisions, which allow licensed CASPs to provide services across all 27 EU member states based on their Bulgarian authorization. This creates significant opportunities for Bulgarian-licensed businesses to scale across Europe without obtaining additional national licenses.

The regulatory framework continues to develop with ongoing adoption of secondary legislation and technical standards. The FSC has issued ordinances on fees and is expected to provide additional guidance as the market matures. Bulgaria also participates in the Crypto-Asset Reporting Framework (CARF) initiative, which will increase tax transparency through mandatory reporting by crypto-asset service providers.

Looking ahead, Bulgaria’s transition to the euro, planned for the coming years, may have implications for how cryptocurrency businesses operate, particularly those dealing with fiat currency conversions and stablecoin transactions.

For Current Information:

• Financial Supervision Commission (FSC): https://www.fsc.bg/en/
• FSC Cryptoassets Section: https://www.fsc.bg/en/cryptoassets/
• Bulgarian National Bank (BNB): https://www.bnb.bg/bnben/
• National Revenue Agency (NRA): https://www.nra.bg/en
• European Securities and Markets Authority (ESMA) MiCA Register: https://www.esma.europa.eu/esmas-activities/digital-finance-and-innovation/markets-crypto-assets-regulation-mica