Once, to be European meant a passport packed with opportunity, a promise to build a life anywhere from Dublin to Berlin with few obstacles and fewer questions asked. But as the world grows more digital and capital more mobile, Europe’s governments are tightening the screws in ways the continent hasn’t seen since the pre-Schengen era. Not content with controlling your wallet, they now want a share of your income wherever you are and to keep a watchful eye on what you say and store online.
In this essay, I'm going to explore the spread of citizenship-based taxation and the growth of financial and digital surveillance laws across Europe and the UK. Whether these ambitious proposals actually serve their goals and how, in the age of crypto, citizens might just have the last word.
...and just so we're clear on what my bias is, I'm a "taxation is theft" guy.
France’s targeted universal tax isn’t just radical, it’s a seismic shift. If passed in full, French citizens who’ve spent three or more years in France in the past decade could wind up on the hook for French taxes no matter their current residence status. The theory? Prevent wealthy citizens from exploiting “paper” moves to Dubai or the Caribbean. The reality? Creating lifetime fiscal umbilical cords that would make even the United States blush.
How radical? Only the US and Eritrea attempt full citizenship-based taxation and both are notorious for aggressive collection, mountains of paperwork, and driving thousands to renounce their passports each year.
Implementation woes: Roughly 129 bilateral tax treaties would need renegotiating, and credits to prevent double taxation are fiendishly complex. Oh, and the risk of creative non-compliance? Astronomical.
While France may be the loudest, other states are signalling sympathy. Spain, Italy, Finland, and others have enhanced scrutiny on offshore wealth and incentivised reporting, all in the name of “fairness”. The pandemic left government coffers stripped bare, fuelling the allure of taxing those who are seen as “escaping their duty.”
But here’s the rub: When you criminalise exodus, don’t be surprised when people look for the nearest exit; be it a second passport, a discreet asset transfer, or a deep dive into DeFi.
Spain’s recent rules demand:
Reporting cash withdrawals over €3,000
72-hour notice for sums above €100,000
Fines up to 10% for non-compliance
The rationale? Anti-fraud, anti-money laundering. The effect? Erosion of personal financial autonomy, with banks as the new border guards of your cash.
Across the continent, the digital euro project and ever-tighter Anti-Money Laundering (AML) directives aim to leave little room for unmonitored financial activity. What began as an anti-crime crusade is fast becoming a near-comprehensive system for tracing, taxing, and even pre-emptively policing the financial lives of ordinary citizens.
If every cent is trackable, dissent and privacy become risky habits. Societal trust falters. And those with means or technical savvy don’t comply. They evade, adapt, or leave.
The UK’s Online Safety Act swings the pendulum of digital regulation far in the direction of enforced responsibility on major platforms. Platforms now face statutory requirements to:
Proactively remove illegal or “harmful” content
Install age verification or assurance for certain services
Conduct risk assessments of their algorithms and recommendation feeds
Grant unprecedented transparency and reporting to Ofcom, the powerful UK regulator
Penalties for violation range from enormous fines (up to 10% of global turnover) to outright blocking of services in the UK. Frankly this legislation far exceeds Orwell's musings on state surveillance and control.
While intended to protect children and consumers, critics argue the Act risks:
Overzealous content takedowns, incentivising platforms to err on the side of censorship
The undermining of privacy for encrypted messaging (endangering decentralised or DeFi-based communications)
Pricing smaller, innovative projects (especially in crypto and blockchain) out of compliance
“Safety by design” may sound noble, but when the design is set by government fiat, innovation invariably suffers. The sectors most attuned to privacy and open protocols, including crypto, stand to lose the most or ride for the border.
Crypto was born as a response to state overreach and monetary manipulation. Europe’s new regulatory wave is proving to be a baptism by fire and an unexpected growth opportunity.
The more governments clamp down on cross-border capital and privacy, the more crypto use cases shine. Decentralised Finance (DeFi), privacy coins (such as Monero or Zcash), and non-custodial wallets are designed to resist both blanket compliance and censorship. Each new reporting law nudges a few thousand more users into self-custody and off-the-grid transactions.
The Online Safety Act and EU equivalents could see decentralised exchanges (DEXs), marketplaces, and social platforms face unsustainable compliance costs or simply block UK/EU IP addresses. But with crypto, if you know the (decentralised) address, you’re in. Everything else is censorship-resistant white noise.
State actors may try to ban or geo-block “uncompliant” crypto projects. But code knows no borders. The harder the digital state squeezes, the more liquidity, developers, and users relocate to jurisdictions with breathing room; legal, technical, or both.
See TechUK’s position for the industry’s response.
As the state multiplies its fiscal and digital claims, a new European psyche emerges; part financial anarchist, part global nomad.
Passports as assets: Services like CitizenX help citizens compare, acquire, and leverage multiple citizenships to maximise mobility and privacy.
Jurisdictional arbitrage: The fastest-growing crypto communities form where regulation is nimble or simply indifferent (think UAE, Singapore).
Peer-to-peer rebellion: Encrypted messaging, decentralised storage, zero-knowledge proofs, all become everyday tools for those unwilling to accept the “nanny state” standard.
Europe (and its former British sibling) now faces a classic dilemma. Tighten the rules to keep wealth, speech, and people in place or risk turning citizens into “customers” with ever more compelling reasons to exit. The grand experiment of citizenship-based taxation and platform regulation may fill some immediate fiscal holes. But the deeper question is whether it prompts a renaissance of creative escape in hardware, code, and the irrepressible free spirit of the digital age.
As the centuries-old game between regulator and regulated escalates, every clampdown on autonomy makes the world of crypto, decentralised infrastructure, and open borders a little brighter and a little more essential.
Europe’s great fiscal and digital tightening isn’t just a policy debate. It’s a test of what it means to be a citizen and whether technology or law will define the future of individual freedom.
Crypto and Censorship-Resistance:
Whenever states clamp down, history shows escape routes multiply. Explore how zero-knowledge cryptography and decentralised systems thwart surveillance in zkProof.org’s primer.
Gryphonboy
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