Overview
- On Sunday, Tánaiste Simon Harris announced that cryptocurrency will not be part of Ireland's upcoming savings and investment initiative.
- The scheme excludes cryptocurrencies, derivatives, and interest-bearing cash, while allowing investments in shares, bonds, funds, and ETFs.
- This initiative aims to redirect a portion of the $203 billion (€175 billion) in bank deposits held by Irish households.
Cryptocurrencies will not be included in the tax-advantaged savings accounts that Ireland plans to offer to all adults in the nation.
Simon Harris, who serves as both Tánaiste and Minister for Finance, outlined the scheme in a video shared on Instagram, emphasizing his goal to help individuals enhance their economic resilience. Participants will be allowed to invest in shares, bonds, funds, exchange-traded funds, and insurance products, as detailed in various reports. However, crypto assets, along with derivatives and interest-bearing cash, are prohibited.
Myriad: What's Bitcoin's next price movement? Click to predictAll Irish residents aged 18 and older will be eligible for one account. Contributions made up to a specified tax-free limit will be exempt from taxes, while amounts exceeding this limit will incur a low flat tax rate annually. There will be no minimum contribution or lock-in period, although an annual contribution ceiling will apply. The specific thresholds and rates will be unveiled on Budget day, October 6, with accounts expected to be available next year.
The initiative targets the approximately $203 billion (€175 billion) currently held in Irish household deposit accounts. According to research from the Central Bank of Ireland, Irish households have only 2.3% of their financial assets invested directly in shares and bonds, compared to the EU average of 7.5%, and a little over 2.2% in investment funds, placing Ireland among the lowest in the region, despite hosting over €5 trillion in fund assets.
Tax Benefits of the Initiative
The exclusion of crypto comes as the government is poised to relax tax regulations on the approved investment products. Harris confirmed that the deemed disposal rule, which taxes certain funds as if they have been sold every eight years at a rate of 38%, will not be applicable to these new accounts. He mentioned that the government will review this rule more comprehensively in the weeks ahead.
The tax rate was recently reduced from 41% to 38% in the last budget, and a 2024 government report on the funds sector suggested eliminating it entirely. Earlier this year, Harris indicated to the Dáil that he was "not convinced" this rule was appropriate anymore, labeling it as "outdated."
Cryptocurrency is one of the few investment types that Irish savers currently engage with. The Central Bank research indicates that around 10% of adults own crypto-assets, predominantly young men, with an average investment of €2,266. More than half of these individuals reported purchasing crypto out of curiosity.
The decision to exclude crypto follows a series of tightening regulations. Harris introduced Ireland's first national anti-money laundering strategy on August 13, which includes stricter checks on transactions involving private wallets and enhanced due diligence for firms dealing with foreign crypto entities. This builds on a 30-point action plan released in June that identified crypto-asset misuse as a growing financial crime risk in the country.
The scheme was initially announced in March and will be fully detailed in Budget 2027.