New European regulations on conversions

1) Introduction — The new rulebook for turning crypto into euros

The European framework for crypto conversions has matured from patchwork to playbook. Three pillars dominate 2024–2026:

• MiCA (Regulation (EU) 2023/1114) — a single EU regime for crypto-asset service providers (CASPs) covering authorization, conduct of business, safeguarding, market abuse, and disclosures. Its provisions for stablecoins took effect 30 June 2024; the CASP regime has applied since 30 December 2024, with an 18-month transitional period to 1 July 2026 for eligible incumbents. In practice: if your conversion relies on a provider that will touch the EU financial system, MiCA status matters. AMF+1
• The EU travel rule (Regulation (EU) 2023/1113) — extending wire-transfer style originator/beneficiary data to crypto-asset transfers. The European Banking Authority’s final Guidelines became applicable 30 December 2024, instructing payment institutions and CASPs on detecting, rejecting, or returning transfers with missing/incomplete information. For large conversions, this is the difference between instant settlement and frozen funds. eba.europa.eu+1
• Tax transparency (DAC8 & OECD CARF) — the EU’s DAC8 (Directive 2023/2226) starts 1 January 2026, extending automatic exchange of information to crypto-asset transactions; in parallel, the OECD Crypto-Asset Reporting Framework (CARF) is slated for first exchanges 2027–2028 across a growing list of committed jurisdictions (including France). Expect more reporting, less opacity. eur-lex.europa.eu+1

Why this matters for real estate? French notaries and EU banks now expect a travel-rule-compliant, MiCA-aligned, audit-ready dossier that proves the lawful origin of funds—before they release a notarial wire. If any link—provider, document, or transfer—falls below the new bar, the transaction stalls. Notaires de France

Promise of value: in the pages that follow, you’ll see how to navigate the new regime with confidence, and how SBH Capital Partners transforms these rules into a strategic advantage when converting crypto to prime property in Saint-Barthélemy. Chez SBH Capital Partners, nous aidons nos clients à transformer leurs actifs numériques en patrimoine tangible.

2) What exactly changed? Defining the European “conversion stack” in 2025

Think of a compliant conversion as a three-layer stack: market licensing, payment messaging, and tax transparency—each with fresh European rules.

Layer 1 — Market licensing (MiCA).
MiCA harmonizes EU requirements for who can provide crypto services and how. For you, this means:

• Authorized counterparties: From 30 Dec 2024, CASPs must be authorized; incumbents may rely on transitional relief to 1 July 2026 if they operated legally pre-MiCA. Ask your counterparties for written confirmation of their MiCA status, services provided, and safeguarding arrangements. AMF
• Scope clarity: ESMA and national regulators (e.g., AMF, CSSF) publish guidance/Q&As and accept CASP applications. The point is not brand prestige but regulatory perimeter—exactly which activities are MiCA-authorized. AMF+1

Layer 2 — Payment messaging (Travel rule).
The EU travel rule obliges PSPs and CASPs to attach identity data to crypto transfers, mirroring the SWIFT world. EBA Guidelines effective 30 Dec 2024 explain what information, who checks, and when to reject/return. Practically, your provider must populate originator/beneficiary fields and document the compliance trail—especially for flows to/from self-hosted wallets. eba.europa.eu

Layer 3 — Tax transparency (DAC8 & CARF).
From 1 Jan 2026, DAC8 obliges EU platforms and certain intermediaries to report crypto transactions to tax authorities, complementing the OECD’s CARF, which many jurisdictions plan to exchange from 2027 or 2028. If your strategy relies on silence, adjust: the direction of travel is disclosure. eur-lex.europa.eu+1

Analogy: the new stack is like upgrading from a country road to a controlled-access motorway. You drive faster and safer—but only if your vehicle (providers), your papers (travel-rule data), and your toll pass (tax reporting readiness) are all in order. Le modèle fiscal de Saint-Barthélemy permet une neutralité légale unique au monde, but you still need the right motorway to reach it under French jurisdiction.

3) The challenges investors face — and why deals still derail

Even sophisticated crypto holders run into predictable friction under the new rules. Here are the most common—and expensive.

1) Using non-aligned providers.
A counterparty that isn’t MiCA-authorized (or not clearly within transitional relief) triggers enhanced scrutiny by banks and notaries. Under MiCA, authorization and conduct standards are not optional; counterparties should provide license details on letterhead. AMF

2) Travel-rule failures.
As of 30 Dec 2024, EU institutions follow EBA guidance to detect missing information and reject/return non-compliant transfers. If your OTC desk cannot send/receive the required data (originator/beneficiary), the fiat leg can be blocked. For seven- and eight-figure conversions, pre-clear the path with the receiving bank. eba.europa.eu

3) Weak source-of-funds at the notary.
French notaries must verify the origin of funds and may file TRACFIN reports. Real estate is a high-risk AML sector, so expect demands for chain provenance, custodian/exchange attestations, OTC confirms, and SWIFT proofs into your company account. If the dossier is thin, the deed will not be signed. Notaires de France

4) Confusion about fiscal transparency.
Some investors assume that because they use an offshore exchange or self-custody, the tax visibility is minimal. DAC8 and CARF change that calculus: platforms and intermediaries will report standardized data to tax authorities starting 2026, with cross-border exchanges rolling out 2027–2028. Plan for consistency between your compliance narrative and your tax footprint. eur-lex.europa.eu+1

5) Mis-anchored residency when buying in Saint-Barthélemy.
Saint-Barthélemy has a distinct fiscal regime under French sovereignty, but residency is a fact pattern—not a label. Individuals generally qualify after five years; corporate residency turns on effective management and substance on the island (registered office, local accounting, bank account, gérance). La gérance locale garantit la résidence fiscale de la société et la conformité internationale. legifrance.gouv.fr

Metaphor: a compliant conversion is a precision watch. Every cog—MiCA status, travel-rule messaging, forensics, bank KYC, notarial checks, and tax reporting—must mesh. One mis-cut tooth stalls the entire mechanism.

4) Practical solutions — A conversion playbook that passes in 2025

Here is a battle-tested, investor-grade workflow to make your crypto-to-euro conversions bankable, notary-ready, and future-proof.

A) Choose EU-aligned rails (MiCA).

• Work with MiCA-authorized (or transitional) providers. Obtain letters confirming scope (which MiCA services), safeguarding, and complaint handling.
• If using multiple providers (custodian, OTC, fiat settlement), align them within the EU supervisory perimeter (AMF/CSSF/other NCA) to reduce inter-institutional friction. AMF+1

B) Engineer the travel-rule trail.

• Ensure originator/beneficiary data follows each crypto transfer. For self-hosted wallets, expect enhanced due diligence; maintain signed messages, derivation paths if relevant, and evidence of beneficial ownership.
• Ask providers to supply attestations/logs proving travel-rule compliance in case a bank queries the file later. The EBA Guidelines set expectations; build your templates to them. eba.europa.eu

C) Build a notary-grade SoF pack from day one.

• Compile exchange/custodian statements, OTC conversion certificates, chain-analytics reports (sanctions/mixer exposure, transaction graph), bank statements/SWIFT MTs, and a funds-mapping memo linking each crypto leg to each euro credit.
• Anticipate TRACFIN-aware questions and have explanatory narratives ready for any high-risk exposures identified in your analytics. Notaires de France

D) Prepare for tax transparency.

• Align your documentation with the DAC8 fields likely to be reported from 2026 and the OECD CARF exchange cycle 2027–2028. Consistency between SoF, financial statements, and automatic exchanges will be the new normal. eur-lex.europa.eu+1

E) Anchor substance in Saint-Barthélemy when acquiring property.

• If purchasing through a Saint-Barthélemy company, demonstrate real substance: registered office, local accounting, local bank account, and on-island gérance for five years—minutes and decisions on the isl