Cryptocurrency in Bulgaria

    Bulgaria has taken measured steps toward crypto regulation, aligning with EU standards while protecting its financial system. Since 2018, authorities have treated cryptocurrencies as taxable "intangible assets" but not official currency. The Bulgarian National Bank monitors market stability, while financial investigators implement EU anti-laundering protocols. Regulation emerged due to EU requirements, tax concerns, and consumer protection needs. Currently, Bulgaria lacks local crypto licensing but follows EU AML standards. The tax authority actively tracks crypto transactions, applying a 10% flat tax on gains. With MiCA implementation expected in 2026, Bulgaria's framework will likely tighten, though the BNB remains cautious about crypto's role in the financial system.

    Basic Scene: Adoption & Use Cases

    Bulgaria's crypto market shows organic growth, driven by individuals and businesses rather than institutional support. While adoption metrics remain unofficial, clear use cases have emerged through grassroots demand and fintech innovation.

    Key Uses

    • Cross-border remittances via stablecoins.
    • SME international trade settlements.
    • Inflation hedging with Bitcoin.
    • Tech industry contractor payments.
    • Retail micro-investing through apps.

    Overall Crypto Market in Bulgaria

    Bulgaria's cryptocurrency sector shows promising growth, with projected revenues reaching $29.5 million in 2025, expected to rise to $39.6 million by 2026 (34.27% CAGR). The Bulgaria traders stands at 8.96%, reflecting increasing retail participation. 

    While the market remains largely dependent on EU-based exchanges due to the absence of local licensed platforms, the country is steadily progressing toward MiCA compliance by 2026. This transition could bring more structured oversight while sustaining market expansion.

    Crypto Regulation in Bulgaria

    Bulgaria maintains an open but cautious stance toward digital assets. Cryptocurrencies operate in a legal gray area permitted but not officially recognized as payment instruments by the Bulgarian National Bank (BNB). Under EU anti-money laundering directives, crypto businesses must register with Bulgaria's Financial Intelligence Directorate and apply risk-based customer checks. While trading remains accessible, most traditional banks block crypto-related transactions, creating hurdles for fiat conversions. The regulatory landscape is expected to formalize when Bulgaria implements the EU's MiCA framework in 2026.

    Crypto Exchanges & Trading Platforms

    Bulgaria's crypto market lags behind EU peers, lacking licensed local exchanges in 2025. Traders must use overseas platforms or informal P2P networks for crypto deals. The absence of local exchanges stems from regulatory uncertainty ahead of MiCA implementation and banking restrictions on crypto businesses.

    Exchanges & Trading Platforms

    • No Bulgarian-licensed crypto exchanges currently exist.
    • Most traders use EU-regulated platforms like Binance and Kraken.
    • Peer-to-peer (P2P) markets remain popular for fiat conversions.
    • Decentralized exchanges see growing adoption among tech-savvy users.
    • Banking restrictions complicate fiat deposits/withdrawals for all platforms.

    Cryptocurrency Wallets & Security

    Bulgarian crypto users predominantly rely on global wallet solutions due to the absence of locally developed alternatives. The decentralized nature of wallet usage presents both opportunities for financial sovereignty and challenges for consumer protection. Security concerns have escalated alongside adoption, with authorities noting particular vulnerabilities in the current ecosystem.

    Wallet Usage & Security Landscape

    • MetaMask dominates for Ethereum and EVM-compatible chains.
    • Trust Wallet remains popular for multi-chain asset management.
    • Hardware wallet adoption lags behind regional peers.
    • Sophisticated phishing schemes target Bulgarian users.
    • Fake wallet apps circulate on unofficial app stores.
    • Private key management remains weak among retail users.
    • No local regulations govern wallet security standards.

    Crypto Taxation in Bulgaria

    Bulgaria taxes crypto earnings at 10%, covering both investment profits and professional trading/mining income. While crypto trades avoid VAT, spending digital assets on purchases follows normal VAT rules. This approach aligns with EU tax treatment while keeping compliance relatively simple compared to other jurisdictions. The National Revenue Agency has increased monitoring of crypto-related transactions, though enforcement remains inconsistent for smaller, unreported trades.

    Crypto Community & Education

    Bulgaria's crypto sector shows steady growth, with Sofia University now offering blockchain education to develop skilled professionals. Though unclear regulations deter major investors, fintech leaders like Paynetics' Ivo Georgiev actively push for digital currency adoption.

    The community thrives through informal tech meetups in Sofia, though lacks large-scale industry events. Most education occurs through online platforms rather than formal programs, reflecting the market's grassroots development stage.

    Future of Crypto in Bulgaria

    Bulgaria's crypto market stands at a crossroads as the 2026 MiCA deadline approaches. The EU-wide framework promises to reshape the sector through standardized licensing and supervision protocols. 

    While institutional adoption remains slow, growing fintech innovation and SME crypto usage suggest steady expansion. The government may introduce tax refinements and explore blockchain applications in public services, though the BNB maintains caution. If regulation balances oversight with innovation, Bulgaria could emerge as a Southeast European hub for compliant crypto services.

    Conclusion

    Bulgaria's crypto future hinges on MiCA implementation, balancing regulation with innovation. While adoption grows organically, clearer rules could unlock institutional potential. The market's trajectory depends on tax adjustments, banking access, and whether Bulgaria embraces crypto's economic opportunities or maintains cautious restraint.

    FAQs

    1. Can Bulgarian taxpayers deduct crypto trading losses from capital gains?

    No. Bulgaria's flat tax system doesn't allow loss offsetting. Each taxable transaction stands alone, with profits taxed at 10% regardless of other losses.

    2. Do Bulgarian crypto miners pay different electricity rates?

    No special rates exist. Miners pay standard commercial electricity tariffs, which increased 18% in 2025 due to energy market reforms.

    3. How are airdrops taxed in Bulgaria?

    They're taxed as income at market value upon receipt. The National Revenue Agency treats them similarly to mining rewards (10% income tax).

    4. Can Bulgarian companies pay dividends in cryptocurrency?

    No. The Commerce Act requires dividend payments in BGN, though companies can issue bonus tokens as non-cash benefits (taxable at 10%).

    5. Are crypto donations to Bulgarian charities tax-deductible?

    Only if converted to BGN first. Cryptocurrency donations themselves don't qualify for tax deductions under current laws.

    6. Do Bulgarian banks report small crypto-fiat conversions?

    Yes. All conversions are reportable under AMLD6, though only transactions exceeding €1,000 trigger mandatory suspicious activity reviews.

    7. Is staking through Bulgarian validators more tax-efficient?

    No. The same 10% income tax applies regardless of validator location, as Bulgaria taxes worldwide income.

    8. Can tourists claim VAT refunds on crypto purchases?

    No. VAT rules only apply to traditional goods purchases with fiat currency, not crypto transactions.

    9. Are crypto earnings considered for mortgage applications?

    Most banks exclude crypto income from loan assessments due to volatility concerns, per BNB guidelines.

    10. Do Bulgarian crypto traders need to file taxes if they only trade between coins?

    Yes, every crypto-to-crypto trade is considered a taxable event. Traders must calculate gains in BGN using market values at transaction time and pay 10% capital gains tax on profits.