Tokenized Economy: In a Tax Perspective

Jakob Andreas Dinesen, Kasper Anker Gregersen & Mark Michael Olskær Hansen

Student thesis: Master thesis


Blockchain and cryptocurrencies have in the previous years continuously impacted the market trade with a broader and deeper understanding of the technology, which have led to the growing use of block-chain in a more digital and tokenized economy.
This thesis focusses upon the possibilities of various assets and securities within blockchain and elaborates on how the Danish taxation laws are characterizing these tokens in comparison to its oppos-ing current financial counterparts in the economy and society.
The economic objective of the thesis is to analyze and address how the use of blockchain and tokenization can have a potential impact on transactions costs for transacting participants. The funda-mental theories regarding transaction cost economics was first addressed by Ronald H. Coase in “The nature of the firm” and subsequently further specified by Oliver E. Williamson in “The Governance of Contractual Relation”. The theories are in the economic analysis used to address how the use of block-chain might shift market structures for firms, and furthermore used to analyze the underlying research question of how the use of blockchain might minimize current transaction cost on a market basis. The economic conclusion indicates that external factors both positively and negatively need to be regulated in order to yield the underlying efficiency gains that blockchain can contribute with to a market.
The legal objective of the thesis is to address how cryptocurrencies qualify within current taxa-tion legislation in Denmark. The legal analysis concludes that most cryptocurrencies will most likely be taxed as assets held for capital investment for people and companies with tax obligation to the state of Denmark. This results in both investors and issuers being governed by a less favorable income tax and deduction rights compared to other investment alternatives.
By combining the findings from both analyses, an integrated analysis aims to incorporate a solu-tion in which new regulative corrections could bolster the economic conclusion on how regulative cor-rections could partly support positive external factors. In addition, imposing regulative sanctions on neg-atively external factors are advocated, while improving the legal certainty of the tax law, with consider-ation of the principle of neutrality.
The overall conclusion of the thesis specifies that economic efficiencies can be supported suffi-ciently if regulative corrections are inaugurated in the current taxation laws in Denmark.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
Publication date2020
Number of pages168
SupervisorsLouise Fjord Kjærsgaard