Early drafts of the new federal coalition agreement are beginning to surface, and—as anticipated—the hunt for crypto accounts is back on.
Among the most notable proposals is an expansion of the reporting obligations to the Central Point of Contact (CAP), the National Bank of Belgium‘s registry for bank accounts and financial contracts. The CAP was originally designed to monitor traditional financial institutions, but lawmakers now intend to include ‘crypto asset accounts’ within its scope.
Cryptocurrency accounts are currently not explicitly listed among the foreign accounts that must be declared. This will change with the new legislation.
Custodial or Non-Custodial
Traditionally, the notification requirement for foreign accounts to the CAP stipulates that the concept of a ‘bank account of any kind’ should be interpreted broadly. It includes, among others, current accounts, savings accounts, term deposit accounts, securities accounts, and accounts linked to a mortgage or any other form of credit. This applies to the extent that such an account exists or has existed with a bank, exchange, credit, or savings institution established abroad.
Often, crypto wallets are held with foreign entities that do not provide financial services similar to those of Belgian financial institutions. In such cases, they do not need to be declared. However, custodial wallets—where an intermediary manages the private keys and secures the assets—must be reported, according to the tax authorities, if the intermediary is located abroad and provides professional financial services similar to those of Belgian institutions.
That said, this is easier in theory than in practice. For instance, when reporting to the CAP, you are required to provide both the account number and the address of the financial institution. However, since crypto wallets do not use traditional account numbers and crypto service providers often operate entirely online, an alternative reporting method is currently necessary for crypto accounts. One possible solution is to use your username in place of a conventional account number.
On the other hand, non-custodial wallets that are not linked to any platform and where no intermediary is involved in the safekeeping of funds or the management of private keys, do not need to be declared in the personal income tax return nor reported to the CAP, given the current legal framework and the context outlined before.
The Hidden Costs of Hiding Crypto
Failing to comply with reporting obligations can have serious consequences, including administrative fines and tax surcharges:
- Administrative fines: If you fail to report foreign accounts — including cryptocurrency accounts — or do not register them with the Central Contact Point (CAP), you may face administrative fines of up to €1,250 per violation.
- Tax surcharges: If the tax authorities determine that you have concealed taxable income from crypto assets, this may result in tax surcharges ranging from 10% to 200% of the tax owed.
New Definition Without a New Understanding
The draft legislation defines a ‘crypto asset account’ as “an account to which crypto-assets, as defined in Article 2, §1, point 7 of Regulation (EU) 2024/1624, can be credited or from which these crypto-assets can be debited”. Article 2, §1, point 7 refers to “crypto-asset as defined in Article 3(1), point (5), of Regulation (EU) 2023/1114 except when falling under the categories listed in Article 2(4) of that Regulation”, which is defined as a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology.
The draft legislation also refers to the ‘opening’ and ‘closing’ of such accounts—language borrowed directly from traditional finance. However, this legal phrasing suggests a fundamental misunderstanding of how cryptocurrencies operate in practice, especially in regards to non-custodial wallets.
Crypto Accounts Are Not Bank Accounts
In a conventional banking setup, an ‘account’ represents a centrally managed ledger maintained by a financial institution, with a balance directly linked to a named individual or legal entity. Crypto does not work that way.
Take Bitcoin, for example. It operates on a decentralized model using so-called Unspent Transaction Outputs (UTXOs), which are controlled by whoever holds the corresponding private key. There are no accounts or balances in the traditional sense—just permissions granted through cryptography. Ownership, in this context, is determined solely by the blockchain itself. Whoever can provide a valid digital signature for a transaction effectively demonstrates control over a specific output—and therefore the ability to spend it.
Trying to map these decentralized systems onto centralized regulatory frameworks is like trying to fit a square peg into a round hole. The used terminology does not match the technology.
What Exactly Is a Wallet?
A non-custodial crypto wallet does not ‘hold’ any assets. Instead, it stores cryptographic keys that allow users to interact with blockchain networks. The assets themselves remain on the blockchain, which is distributed globally across thousands of nodes.
So when someone ‘opens’ a wallet, they are essentially generating a new set of cryptographic credentials by means of specialized software—not opening an account at a bank or financial institution. Conversely, ‘closing’ a wallet just means deleting or no longer using that key pair. It is a personal act, not a regulated one.
The Illusion of Location
The draft legislation also mentions foreign-held ‘crypto accounts’, suggesting they could be subject to the same kind of cross-border reporting currently required for traditional bank accounts. But this ignores a fundamental characteristic of blockchain networks—they are borderless.
Blockchains do not have physical locations. They are not hosted in any one country and cannot be tied to a jurisdiction in the traditional sense. Attempting to impose location-based rules on them is not just impractical—it is conceptually flawed.
Policy Needs to Catch Up with Technology
It is understandable that regulators want greater transparency in crypto transactions. But applying outdated banking terminology to a radically different system will not achieve that. On the contrary, it risks confusion, overreach, and ultimately, ineffective enforcement. Instead of retrofitting old frameworks, policymakers need to rethink the regulatory approach altogether—one that is informed by how the technology actually works, not how financial systems have worked in the past.
Given the flawed and outdated terminology used in the proposed legislation, it is not unlikely that taxpayers will be able to challenge—or even sidestep—the underlying legal obligation to report their crypto accounts to the Belgian authorities.