Germany’s Crypto Adoption Situation
As the most cryptocurrency-friendly economy, this Western European nation is now tied with the US.
Many individuals think that the mass acceptance of cryptocurrencies last year was the industry’s much-needed breakthrough. Despite an increase in worldwide regulation, the institutional use of cryptocurrencies helped the sector grow to a $3 trillion market size.
According to Chainalysis, the usage of cryptocurrencies increased by an astonishing 880 percent in 2021, and TripleA reports that there are more than 320 million crypto users globally.
Germany was one of the nations to see a boom in cryptocurrency activity, according to a recent Coincub ranking report on cryptocurrencies. Prior to the United States, which rose from third position in the first quarter of the year, the Western European nation rose three spots to surpass the rest of the crypto economies worldwide.
Germany is not renowned as a worldwide crypto powerhouse, but given the country’s acceptance rate and crypto activity, this may change over the next several years. Germany is one of the few nations where authorized cryptocurrency exchanges and wallet providers are recognized by law as being part of the financial services sector.
On capital gains from Bitcoin (BTC) and Ethereum (ETH) held for more than a year, the nation has enacted a zero-tax policy. Germany has also benefited greatly from its progressive cryptocurrency regulations, large population of cryptocurrency users, Bitcoin nodes, and advantageous tax structure. Despite the fact that there is currently no explicit law for cryptocurrency usage in the nation, the German Banking Act does permit banks to hold cryptocurrency in their custody.
Due in large part to financial services company Sparkasse’s initiative, which allows 50 million people to purchase Bitcoin straight from their bank accounts, Germany has been quite successful in the cryptocurrency market this year.
The government has always been aggressive when it comes to regulating cryptocurrencies, and when it announced a national blockchain policy in 2019, it reiterated that attitude. By making that choice, the government sought to establish the nation as a center for blockchain and cryptocurrencies and to take advantage of the technology’s potential to further digital transformation, including the creation of blockchain, Web3, and metaverse applications.
According to Gemini’s 2022 Global State of Crypto study, 53 percent of Germans confess to being “crypto inquisitive,” and 43 percent of high-income Germans possess crypto assets, indicating that the German government’s efforts seem to have been successful. According to the survey, 46 percent of German women possess bitcoin, one of the highest percentages in the world, and over 17 percent of all Germans own cryptocurrencies in some form.
The world’s largest cryptocurrency exchange Coinbase received the first crypto custody company license from Germany’s Federal Financial Supervisory Authority (BaFin) in June 2021. The nation’s crypto authorization is regulated by BaFin.
Early in July, the German financial services business EQONEX Limited unveiled its first-ever product, a physically-backed bitcoin ETN, for German investors.
The central bank of Germany supports both CBDCs and cryptoassets, but it is holding off on implementing any projects until there are clear and robust laws in place.
The lack of decentralized finance (DeFi), which the nation is not presently implementing, is the one blemish on the nation’s otherwise immaculate crypto record. However, the present activity and initiatives in Germany’s crypto sector raise the possibility of a day when Defi is accepted there.