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Santander blocks Bitcoin transactions in Portugal

santander2Banco Santander Totta, a subsidiary of the Spanish bank Santander, has suspended all bitcoin-related transactions.

The bank already had started to block transactions in several crypto-currency exchanges, claiming that these exchanges are trading non-regulated financial products.

The bank sent one customer an email after he complained that he could not transfer funds from Coinbase based in San Francisco to his Santander bank account.

The bank said that Coinbase is an entity dedicated to the purchase and sale of digital coins and that the Santander Totta does not handle transactions related to unregulated digital currencies.

On contacting the helpline, the Santander customer was told of an internal directive to block all transfers using Coinbase’s IBAN.

Coinbase is not the only currency banned by Santander Totta which refuses also to process transactions related to Bitstamp, however, other currencies such as Kraken has no problem with Santander’s processing system.

The Bank of Portugal has said that the Bitcoin is not legal tender in the country despite there now being several digital currency organisations in the EU that are regulated, Coinbase being included.

Banco CTT, Caixa Geral de Depósitos and Novo Banco all say that clients can transfer to and from exchanges of regulated crypto-currencies.

Portugal wants to tax Bitcoin users while avoiding any regulatory responsibility but Portugal’s Ministry of Finance has stated that capital gains from the sale of Bitcoins or any other crypto-currency, are not subject to tax.

“The sale of bitcoins is not subject to IRS taxes in the Portuguese tax system, especially in the category E – Capital – or G – capital gains.” Capital gains will be taxed “when, due to its regularity, it constitutes a professional or business activity of the taxpayer, in which case it will be subject to taxation in category B.”

In view of the doubts, some digital currency enthusiasts in Portugal are considering having a base in Malta, a country where the effective tax rate for non-residents is only 5%.