Tone

Crypto-Friendly Countries. Part 3: Germany

June 9th, 2023

This series is about countries that value crypto.
I was born and raised in Germany, so this one is special to me.
Let’s find out what this country has to offer in terms of new financial technologies.

tl;dr

  1. Germany has 84 million citizens, uses the euro for currency, and joined the EU in 1958.
  2. Crypto is tax-free after a year of holding, but new crypto asset tax laws will come in 2026.
  3. Customers of banks will be able to have crypto accounts in the second half of 2023.
  4. There are 106 crypto ATMs all over Germany.

The history of Germany

Germany’s past is long and complicated.
It had many different times and events that have shaped the country.
During the Middle Ages, it was part of the Holy Roman Empire.
The strong participation of Germany in both world wars shaped the 20th century.
After World War II, Germany was split into two states: East Germany and West Germany.
In 1990, the two states came back together to make the Federal Republic of Germany.
Germany joined the EU (European Union) in 1958.
It is home to more than 84 million people, and uses the Euro (€) as the official currency.
It shares borders with eight other EU countries plus Switzerland.

General

Surprisingly, Germany is one of the nations that is most welcoming of crypto.

Living in Germany has several benefits, including a low cost of living and high a quality of life.
It has the largest economy in Europe, excellent infrastructure and job opportunities, greenery, and is among the safest countries in the world.
However, there are some downsides, such as the high amount of tax deducted from a worker’s pay and the cold winters and rainy weather.
Overall, the pros outweigh the cons, and it is an excellent place to live, especially if you are looking for a cheaper place.

The “famous” healthcare system is one of the oldest, dating back to the 1880s.

Germany has over 400 zoos, the most in the world, and more than 1,000 varieties of sausage.

Regulations

Crypto asset companies in Germany must follow Anti-Money Laundering (AML) rules.
BaFin needs to give permission for crypto asset trades.
The abbreviation BaFin is the Federal Financial Supervisory Authority (in German: Bundesanstalt für Finanzdienstleistungsaufsicht).
A BaFin license or crypto custody license is needed for businesses that want to offer crypto services.
You don’t need a license from BaFin to use crypto values instead of cash for sales.
There is no information yet about what licenses are needed for borrowing, lending, and yielding or staking.
Under the EU MiCA law, these rules will also be in place.

Tax

The German Federal Central Tax Office has strict laws regarding crypto income taxation in Germany.
Crypto income and short-term capital gains are taxed at up to 45% plus the solidarity tax.
If the crypto is held for more than a year, no taxes are due!
The same system as Portugal.
The German Federal Central Tax Office (Bundeszentralamt für Steuern, or BZSt) can track crypto.

The EU will introduce DAC8 crypto asset tax laws in 2026.
This will require crypto-asset service companies and institutions to gather, verify, and share information about crypto-assets and their users.
It will cover a wider area than current EU rules, giving banking officials more ways to move.

Crypto ATMs

There are 106 cryptocurrency ATMs spread out over Germany, according to coinatmradar.com.
BaFin is now requiring licenses for Bitcoin ATMs that offer Litecoin and Bitcoin.
In the past, BaFin has shut down and taken Bitcoin ATMs that were not approved, but there are still Bitcoin ATMs in Germany’s largest towns.

Facts

Deutsche WertpapierService Bank (Dwpbank) is releasing a new platform called wpNex that will allow customers to buy bitcoin in the second half of 2023.
This will provide securities processing services to 1,200 banks.
Customers will have crypto accounts in addition to their other accounts.
Dwpbank wants to expand the service to include more crypto, digital assets, and tokenized stocks.

Conclusion

I found a lot of resources that gave Germany pole position as the most crypto-friendly country.
The sources are Blockchain Magazine, Beincrypto, and Coin Telegraph.

Germany is one of the most crypto-friendly countries due to its policies and regulations.
It allows tax-free investments in crypto, a positive approach towards trading and investment, high numbers of Bitcoin and Ethereum nodes, and a unique method of cryptocurrency taxes.
It has become an attractive hub for crypto investments and the development of blockchain applications in various sectors.

More crypto information and numbers about Germany can be found here.

Twitter thread

 

X

This field is for validation purposes and should be left unchanged.
X