The development of cryptocurrency has brought a number of challenges to tax and legal systems around the world, where regulation and taxation of digital assets continue to adapt to new technologies. The paper starts by clarifying basic concepts essential for understanding cryptocurrencies, such as digital currency, blockchain technologies, mining, etc. Furthermore, through the prism of European regulatory initiatives, particular attention has been paid to the DAC8 Directive, which ensures tax transparency through the exchange of information on crypto-transactions, and to the MiCA Regulation that regulates the crypto-asset market and aims to protect consumers and ensure market stability. The practical application and attitudes of selected States towards the taxation of cryptocurrencies are analyzed in the following work on examples of Finland, Austria, and Switzerland which have developed specific strategies for the Regulation and taxation of cryptocurrencies. Finally, the paper ends with a detailed review of the current tax treatment of cryptocurrencies in the Republic of Croatia. The Republic of Croatia is actively working on the harmonization of national legislation with European legislation, especially through the implementation of the MICA Regulation, which will certainly contribute to greater transparency and security in the cryptocurrency market. Finally, the need for a more detailed explanation of concepts related to cryptocurrencies is emphasized, which would help all market participants, as well as an increase in incentives and relief for “startup” companies so that the cryptocurrency market can successfully develop in a positive direction.