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Looking to live tax-free with crypto in 2025? These five countries, including the Cayman Islands, UAE and Germany, still offer legal, zero-tax treatment for cryptocurrencies.
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Germany News
Germany, officially the Federal Republic of Germany, is a country in central-western Europe. Germany is a powerful country with a strong economy that is fourth in the world by nominal gross domestic product, or GDP. Germany has an evolving regulatory setup for crypto businesses overseen by Germany’s Federal Financial Supervisory Authority (BaFin). Assessment depends on the nature of tokens and involves laws like the German Securities Trading Act and MiFID 2 for financial instruments.
Section 1 (11) sentence 5 of the German Banking Act excludes certain items from being considered crypto assets, such as electronic money, limited network payment systems, specific electronic vouchers, and non-tradable electronic tokens in multipartner programs.
Germany is considered crypto-friendly and treats cryptocurrencies like Bitcoin (BTC) as private money under tax laws. Cryptocurrency transactions by individuals in the European Union, including Germany, are exempt from value-added tax (VAT). Short-term capital gains (held for less than a year) are subject to income tax at regular rates, capped at 45% plus 5.5% Solidarity Tax. Profits under 600 euro are tax-free. Assets held for over a year incur no tax liability. Long-term holdings, even if value increases, remain tax-free. Germany’s stance favors long-term investors, providing exemptions for small transactions and VAT, promoting a friendly environment for crypto enthusiasts.
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Germany’s top banks, including Deutsche Bank and Sparkassen, are entering crypto with regulated trading and custody services by 2026.
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AllUnity, a stablecoin joint venture by Deutsche Bank and DWS, has received a BaFin license in Germany to issue a MiCA-compliant euro stablecoin, EURAU.
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Deutsche Bank reportedly plans to launch a crypto custody service in 2026 with Bitpanda and Taurus, expanding its digital asset initiatives in Europe.
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Sparkassen-Finanzgruppe execs once ruled out adopting crypto over concerns of volatility and risk, and the banking giant also blocked customer crypto transactions back in 2015.
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Ethena Labs and Germany’s BaFin agreed on a 42-day USDe redemption plan, marking the end of a months-long regulatory dispute.
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Analysts are warning of more fiat currency debasement, which is driving a growing appetite for digital assets, including cryptocurrencies and NFTs.
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The German government sold its Bitcoin stash in the summer of 2024, which became a $2.3 billion missed opportunity for Europe’s largest economy.
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Tether’s US Treasury holdings and gold reserves helped the stablecoin issuer absorb the downside volatility of the cryptocurrency market during the first quarter of 2025.
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The $38 million crypto seizure from Bybit hack-linked eXch was the third-largest crypto confiscation in the history of Germany’s federal criminal police.
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The German financial regulator in March froze USDe token offerings over alleged compliance breaches and potential securities law failures.
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Bitpanda secures its third MiCA license, in Austria, expanding its regulatory footprint across the EU as questions emerge over multi-license necessity.
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German regulator halted USDe token offering, citing serious compliance failures and potential securities law violations.
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Deutsche Boerse’s Clearstream to offer crypto custody and settlement services for institutional clients, expanding its Bitcoin and Ether offerings in 2025.
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DekaBank’s entrance into crypto trading marks a case of MiCA’s positive impact on industry adoption within the European Union.
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