Ripple crypto. Credit: Pexels, Rūdolfs Klintsons
The word “cryptocurrency” might sound futuristic and complex, but it’s increasingly relevant in everyday life, particularly in Spain. From 2025, Spanish banks will begin offering cryptocurrency services like buying, selling, and storing digital currencies such as Bitcoin and Ethereum, according to a report by El Confidencial.
If this seems overwhelming, don’t worry – this beginner’s guide breaks it down into simple terms.
What is cryptocurrency?
Cryptocurrency is essentially digital money. Unlike traditional currencies, it isn’t printed or controlled by banks or governments. Instead, it’s secured by cryptography and recorded on a blockchain. Popular examples include Bitcoin and Ethereum.
What makes cryptocurrency unique is its decentralisation – transactions happen directly between people, bypassing central authorities – this is one of its biggest appeals. However, its value can fluctuate wildly, making investing both exciting and risky.
MiCA (Markets in Crypto Assets) is a new EU regulation launching in 2025 to bring clarity and security to cryptocurrency. For Spain, this means major banks including CaixaBank and BBVA will offer crypto services such as trading and storage.
This regulatory step aims to make cryptocurrency safer and more accessible. However, MiCA doesn’t include advisory services, so educating yourself or consulting experts is crucial before investing.
Cryptocurrency’s appeal lies in its potential for dramatic price increases, as seen with Bitcoin recently breaking $100k. However, this potential comes with risks. Prices can plummet just as quickly as they rise, and the market’s lack of regulation has led to scams and hacking. Invest only what you can afford to lose.
What is blockchain?
Blockchain is like a digital ledger – a notebook where every transaction is securely recorded. This ledger is shared across a network of computers, ensuring no single entity has control. Transactions are grouped into “blocks,” each with a unique digital fingerprint, aka hash, ensuring security and complete transparency. This is because blockchains are public, but they preserve anonymity by not attaching personal details to transactions.
Alternative cryptocurrencies
While Bitcoin and Ethereum dominate the market, alternative coins, or “altcoins,” like XRP (developed by Ripple Labs), offer unique features.
According to Forbes Advisor, XRP excels in cross-border payments, settling transactions in 3-5 seconds with minimal fees. Its blockchain, the XRP Ledger, efficiently handles large volumes of transactions, making it popular with banks and payment providers.
However, XRP has faced challenges, including a 2020 lawsuit from the U.S. Securities and Exchange Commission (SEC), alleging it was sold as an unregistered security.
John Vasquez: Advocate for XRP
John Vasquez, also known as Coach JV, is a prominent figure in the XRP community. Through podcasts and social media @coachJV_, he educates followers about XRP’s potential for generational wealth.
What are memecoins?
Memecoins are cryptocurrencies inspired by internet memes or jokes, often created as a parody of the broader cryptocurrency market. Despite their humorous origins, some memecoins have gained significant traction, driven by social media hype and celebrity endorsements.
A prominent example is Dogecoin, initially created as a joke but now a widely traded cryptocurrency. The value of Dogecoin surged recently after endorsement by Elon Musk.
Taxes on crypto profits in Spain
In Spain, cryptocurrency is considered taxable property. Profits from selling or trading crypto are subject to capital gains tax.
As Spain’s tax authorities become more vigilant, keeping detailed records of transactions is essential. Consulting a tax professional is advised.
FAQs about cryptocurrency in Spain
- Is cryptocurrency legal in Spain?
Yes, it’s legal but not considered legal tender. From 2025, under MiCA regulations, banks will offer crypto services, making it easier and safer to trade digital currencies.
- What are the risks of investing in cryptocurrency?
Crypto is highly volatile, with prices capable of dramatic swings. It’s also vulnerable to scams and hacking. Diversifying your investments can help manage these risks.
- Can I buy cryptocurrency through my bank in Spain?
Yes, starting in 2025, banks like CaixaBank and BBVA will provide crypto trading and storage services under MiCA. However, advisory services will not be included.
- How do I choose a cryptocurrency exchange?
Look for platforms licensed in the EU, with transparent fees and strong security measures like two-factor authentication (2FA).
Cryptocurrency is not for the faint-hearted, but it’s a rapidly growing market with immense potential. Whether you’re curious about the technology or looking to invest, start small, stay informed, and never risk more than you can afford to lose.
As Spain’s crypto landscape becomes more regulated and accessible, now is the perfect time to learn the basics.
