Posting, Valuation & Tax

Three entries appear in a valve manufacturer's wallet on this day, and only two of them have anything to do with customers or suppliers. A customer has paid two invoices totalling 18,400 euro stablecoins. A supplier has received 6,250 euro stablecoins. That payment incurred a network fee in ether. How the three entries get from the blockchain into a statement is described in Data Standard & Account Statement. This article takes the next step, the journal entries. Two of them are routine. The third concerns an amount of about one euro and needs more data than the other two combined.

An Account Whose Balance Sheet Line Is Still Open

For every balance in the wallet the company needs its own general ledger account, just as it has one for every bank account. The valve manufacturer therefore keeps two: one for the euro stablecoin and one for ether. What remains open is the balance sheet line under which the first account appears at year end. The German Commercial Code (HGB) has no specific rule for stablecoins. The company settles the classification with its auditor, as set out in Cross-Cutting: Compliance & Reporting.

For the journal entries in this article that matters less than it sounds. They move amounts between accounts, and the movement stays the same whichever line the account is later shown under. Subsequent measurement depends on the classification, that is, what happens to the balance between two reporting dates. The mechanics of a single payment do not. In the chart of accounts one account per balance is therefore enough to begin with; its mapping to a balance sheet line is added once the classification is settled.

The Receipt Counts at Par

The valve manufacturer's invoices are in euros. When the stablecoin arrives, accounting books the balance against the two receivables. That amount stands against amount follows from the EU Markets in Crypto-Assets Regulation (MiCAR). A euro stablecoin issued as an e-money token is deemed to be electronic money under Art. 48(2) MiCAR. Under Art. 49(4) the issuer redeems it at the holder's request, at any time and at par value.

The manufacturer's claim is therefore for 18,400 euros, even if the token trades slightly below that on an exchange for a moment. No exchange difference arises on receipt, and the open items are cleared in full. This holds for the e-money token. A stablecoin without this redemption right has no par value on which such an entry could rest. Whether the balance also stays at par at the reporting date is a different matter: a question of subsequent measurement and so of classification. Which receivables are meant when no remittance information comes with the payment is described in Reconciliation & Payment Flows.

The Payment Separates Price and Fee

The second journal entry mirrors the first. The payable to the supplier falls by 6,250 euros, and so does the stablecoin balance. The payable is thus settled in full. The network fee is not deducted from it, even though the same payment triggers it. The supplier has received its 6,250, and the manufacturer owes the fee to someone else. If the fee reduced the open item, a balance would remain on the supplier's account that does not exist.

The fee is also due in a different unit. It reduces the ether balance, which makes it not an ordinary debit but the disposal of a crypto asset. The German Federal Ministry of Finance (BMF) takes the same view in its letter of 6 March 2025 on the income tax treatment of crypto assets. Under paragraph 33, transaction fees are paid in exchange for the service of those who create the blocks. For business assets, disposal proceeds are operating income, and the acquisition costs of the units given up are deducted from them. Where these cannot be allocated individually, the letter allows average acquisition costs (para. 51).

For every fee, accounting therefore needs three values: the quantity of ether from the statement, the price at the time of payment and the book value of the units given up. Suppose the fee is 0.0004 ether, the price is 2,500 euros, and the units were acquired at an average of 2,000 euros. The manufacturer's day then looks like this:

The third line is a proposal, not a rule. The HGB does not deal with the exchange specifically. Whether the commercial accounts record the fee at the market price, as tax law does, or simply expense the book value of the ether is something the company agrees with its auditor. The second approach saves the price lookup. But it separates commercial and tax accounts on every single fee.

For tax purposes, accounting may also use a daily rate. Under paragraph 91 of the letter it must then be determined according to documented rules. Valuation must also stay consistent: the same price source and the same time of day for acquisitions and disposals alike. Each rate therefore needs its source and a timestamp, not just the figure.

If a payment fails, the fee is still due. Only the third line remains: expense and disposal of ether, with no entry on the supplier's account, whose payment is still outstanding. The transaction hash in both statements shows that the expense belongs to a failed attempt and not to a payment missing somewhere.

The Same Kind of Cost, Booked Differently

The case is different when the payment acquires something. In the example in Settling Tokenised Securities, a machine builder buys a tokenised bond through its house bank. Here the classification is clearer than for the stablecoin, provided the bond is entered in a register under the German Electronic Securities Act (eWpG). It is then a crypto security under section 4(3) eWpG, and an electronic security is deemed a thing under section 2(3) eWpG. Accounting records it like a paper bond: securities against bank, as fixed or current assets depending on intent.

The bank's charges form part of the acquisition costs, as does a network fee if the bank passes it on. Section 255(1) HGB expressly includes incidental costs, to the extent they can be allocated to the individual asset. The same kind of cost that was an expense on the supplier payment here increases the bond's book value. The difference lies not in the technology but in what the payment acquires.

Two Rates for One Dollar Invoice

One of the valve manufacturer's customers, the German subsidiary of an American group, is invoiced in dollars and pays in a dollar stablecoin. Accounting records the receipt at the rate on the day of payment. If that differs from the rate on the invoice date, an exchange difference arises on the receivable, as with any transfer in dollars. At the reporting date, section 256a HGB requires assets in a foreign currency to be translated at the mid spot rate. Whether a dollar token falls under this again depends on classification. The redemption claim of an e-money token is in any case denominated in dollars. For ether the question does not arise in this form. The BMF letter of 2025 counts it among the currency tokens that lack the legal status of a currency (para. 3). Its value at the reporting date therefore follows from its market price and from the measurement rule that goes with its classification.

VAT uses a different rate. Under section 16(6) of the German VAT Act (UStG), amounts in foreign currency are converted at the average rate published by the Federal Ministry of Finance for the month of supply. The tax office may permit a daily rate instead. The same invoice then carries two euro amounts, one in revenue and one in VAT. Both are correct, and the ERP system has to record both rates with their source.

Paying in a stablecoin does not change the VAT itself. Under section 10(1) UStG it is assessed on the consideration, meaning everything that makes up the value of what is received in return. For bitcoin and other virtual currencies, the BMF stated on 27 February 2018 that handing them over merely to pay the consideration is not a taxable transaction. The German VAT Application Decree puts them on a par with legal tender in section 4.8.3(3a). It does not mention e-money tokens. Under MiCAR they are deemed to be electronic money in any case. If the manufacturer buys ether to pay its fees, the exchange is an exempt supply under the judgment of the European Court of Justice in Hedqvist (C-264/14).

The network fee itself remains open. For bitcoin, the BMF classified the services of miners as outside the scope of VAT in 2018. The transaction fee, it said, is paid voluntarily and has no direct link to those services. Ethereum has produced its blocks with validators under proof of stake since September 2022. Whether the classification holds for that case the letter does not say, and in September 2026 the VAT Application Decree contains nothing on it. The 2025 income tax letter sees the same fee as consideration for a service. Whether there is a supply for VAT purposes, who makes it and where, the company settles with its tax adviser.

Two Hundred Small Disposals

In day-to-day operations the risk lies not in the individual fee but in their number. Every outgoing payment creates a disposal of ether with a price, a book value and a result. With two hundred supplier payments a month, that means two hundred tiny amounts. Their total barely registers, and yet the record for each has to be complete. Under paragraph 91 the tax authorities accept daily rates only as long as valuation remains consistent. Switching price sources in the middle of the year puts exactly that in doubt. If the stablecoin's classification changes later, the measurement of the balance changes; the journal entries for individual payments stand.

For the CFO this is a cost item that is easily missed in a fee comparison. The network fee is small. What takes effort is booking it properly: choosing and documenting a price source, carrying forward the book values of the ether, reporting disposal results and settling the VAT question. This work arises once as a rule and then with every payment as a record. A cost comparison between stablecoin and bank transfer that counts only the network fee is therefore working with the smaller part.

When a Third Party Covers the Fee

The manufacturer holds an ether balance only because the network charges its fee in ether. The ERC-4337 standard for Ethereum provides another route. A paymaster there is a smart contract that pays the fee instead of the sender. Under the standard it can sponsor fees for its users or accept payment in another token, such as the stablecoin the company pays with anyway. The prerequisite is that the wallet itself is run as a smart contract.

For accounting, the second balance then disappears. If the company pays the fee in euro stablecoins, it is an ordinary expense at par, with no price lookup and no disposal result. If the paymaster's operator bills in euros instead, the fee arrives as a supplier invoice, and the open VAT question has, for the first time, a counterparty with a name and an address. The paymaster thus becomes a feature that sets wallets for businesses apart: it takes the second balance off accounting's hands, and everything attached to it.