The captain regents of the Republic of San Marino – Nicola Selva and Michele Muratori – have introduced a delegated decree on blockchain technologies for businesses in the region.
Specifically, the legal document provides extensive instructions for blockchain-related companies, to legally register with “Istituto per l’Innovazione della Repubblica di San Marino” – San Marino Innovation Institute.
As stated in the document, any organizations dealing with blockchain tech in the Republic of San Marino, the EU, or any nation that are not seen as “high risk” and is within the concern of San Marino regulation, is cleared to get itself registered with the institute.
The San Marino Innovation Institute aimed to establish clearance in regulations, along with finding out the best way to supervise and enforce them – together with an anti-money laundering (AML) policy – specifically designed for initial token offerings (ITOs or ICOs).
”Utility tokens … shall be regarded as vouchers for the purchase of services or goods offered by the Blockchain Entity… Security tokens … shall be digital assets which represent, alternatively, depending on the underlying instrument: a) participating instruments of the issuer; b) debt securities of the issuer.” The institute has also outlined the differences between utility tokens and security tokens with respect to ITOs.
The decree also set out to provide tax policies for utility tokens and security tokens. Per the decree, when it comes to tax-related concerns, utility tokens will be considered as foreign currency. As for Security tokens, it will be classified as either participating equity instruments or debt securities, all according to its nature. Finally, an exemption from the standard income tax will be granted to both tokens, when they are involved in the generating process of “income generated through operations”.