Is cryptocurrency is legal in Germany?
Are you wondering?
The cryptocurrency market is a very new and exciting thing that has been taking over the world lately.
But there are some caveats.
It’s important to have a general understanding of the laws surrounding cryptocurrency so you can make an informed decision about investing your money.
This blog post will help shed light on what you need to know about cryptocurrencies and the law in Germany.
Is Cryptocurrency Legal in Germany?
Yes, cryptocurrency is legal in Germany, though caution should be taken as to not violate tax laws.
But there are some caveats that investors should keep in mind.
There are also several benefits to knowing about when it comes to investing money into cryptocurrencies too.
Germany is one of the leading economies in Europe and does not intend to restrict the use of virtual currencies, this means it exempts them from German banking regulations.
Such a differentiation makes owning cryptocurrency legal as long as you don’t trade with fiat currency.
According to German criminal law, cryptocurrencies such as Bitcoin are property and not legal tender.
They may be considered as “private” money which is not regulated by the state. As such, no designated institution guarantees transactions with cryptocurrencies, and the decentralized nature of these means that banks cannot simply intervene if things go wrong for one or both parties in a sale.
Furthermore, according to a recent paper by Morgan Stanley, there are no specific restrictions or bans on using digital currencies within the EU despite individual jurisdiction variances.
That being said, we will be looking into good cryptocurrency projects that have the potential to make your investment grow exponentially.
Top 20 Cryptocurrencies to Invest in Germany
If you’re considering investing in cryptos, this list is for you.
This way, even if one of the coins drops significantly it will still be profitable.
That said, in my opinion below are some of the cryptocurrencies I recommend for German investors:
- Bitcoin (BTC)
- XRP (XRP)
- Stellar (XLM)
- Cardano (ADA)
- Dogecoin (DOGE)
- Polkadot (DOT)
- Neo (NEO)
- Celsius (CEL)
- Nano (NANO
- Bitcoin Cash (BCH)
- Bitcoin SV (BSV)
- EOS (EOS)
- VeChain (VET)
- Dai / MakerDao (DAI)
- Binance Coin (BNB)
- NEM (XEM)
- TRON (TRX)
- Dash (DASH)
- BitTorrent (BTT)
- Ethereum (ETH
These are really great projects to invest in as a German. You should check out the list of best cryptocurrencies to Invest in Germany for further analysis on these coins.
However, to buy or invest in these coins as a German you need to use the following cryptocurrency exchanges:
Is Cryptocurrency regulated in Germany?
Yes, Cryptocurrency is regulated in Germany. For example, the German government published an 18-point plan for stricter regulation of financial technology (fintech) services on January 25, 2019.
One main objective was to provide more clarity for investors by assigning virtual or crypto assets different degrees of risk posed to them depending on their properties and the associated risks they pose to retail investors.
These are the main takeaways from German Cryptocurrency Regulations:
- Bitcoins aren’t considered legal tender by BaFin (Federal Financial Supervisory Authority)
- Banking Act amendments allow custody of cryptocurrency.
Do German banks accept Bitcoin or any type of Crypto?
No, German banks do not accept Bitcoin or any type of crypto.
It’s actually a myth.
In Germany, Bitcoin is classified as a commodity, not a currency or financial instrument so German banks cannot accept it.
Furthermore, cryptocurrency exchanges are subject to strict regulations and high investments for security by BaFin (Germany’s financial regulatory body).
So anything crypto-related falls under their jurisdiction.
They don’t seem to be too keen on cryptocurrency though, because they banned companies dealing with virtual currencies back in 2013.
Bitcoin is seen as a speculative commodity much like gold that needs regulators to oversee its use.
How can I buy Bitcoin legally in Germany?
One of the first countries to regulate cryptocurrencies and recognize Bitcoin as a financial instrument was Germany.
The country treated Bitcoin like gold, making it possible for you to use the cryptocurrency whenever needed just like traditional money.
This happened in 2013 when they declared that Bitcoin is considered a private currency under German law.
So, how do you buy Bitcoin in Germany?
To buy Bitcoin in Germany legally, there is no shortage of options available.
Several exchanges allow for direct fiat-to-Bitcoin transactions Such as:
Can you buy crypto with a credit card in Germany?
Yes. In Germany, you can use a credit card to purchase cryptocurrencies.
If you’re looking to buy crypto with a credit card in Germany, then open up an account with a crypto exchange like the ones mentioned above.
You can start with USD or EUR.
Once you’ve verified your bank account information, you’ll be able to make instant purchases of BTC, BCH & ETH at market prices, all achieved within minutes.
With credit cards, there are limits on how much fiat money and cryptocurrency one is allowed to withdraw and spend per day and per week without obtaining prior authorization from Visa or Mastercard’s issuing company (usually a financial institution).
Is Coinbase legal in Germany?
Yes, Coinbase is legal in Germany.
Cryptocurrency exchange Coinbase has obtained approval from Germany’s financial regulator, Bafin, to provide cryptocurrency trading and custody services.
Coinbase is the world’s largest crypto exchange, which means that it processes a lot of transactions each day.
It also offers benefits to the customers that other exchanges don’t have.
Is Binance legal in Germany?
Yes, Binance is legal in Germany as it complies with regulatory requirements.
However, Binance has announced it will be winding down its derivatives and futures products in Germany, Italy, and the Netherlands, three countries that belong to the European Union. In its official statement, Binance stressed:
As the crypto ecosystem evolves globally, we are continually evaluating our products and working with our partners to meet our users’ needs.
How can I sell my Bitcoin in Germany in 2021?
Whether you’ve bought cryptocurrency in Germany on an exchange or earned from mining when you want to sell some or all of your holdings?
Thankfully selling cryptocurrency is easy, and can quickly be exchanged for Euros (EUR) or USDT (Tether).
Can I convert Bitcoin to cash in Germany?
To safely convert your Bitcoin to cash in Germany, you should start by converting the cryptocurrency into Euros using a trusted online exchange. Then transfer this converted currency from your account with that exchange directly to a bank account held at any German financial institution of choice.
What is the future of cryptocurrencies In Germany?
The future of cryptocurrencies in Germany is good. Restrictions and coin ban used to be the norm, but things have steadily reversed as blockchain technology has proven to be a much safer and cheaper solution than the old security model.
European countries, such as Italy and France, now recognize virtual currencies as well-founded means of payment.
They may even replace cash as the preferred method for buying everything from pizzas to cars within 2 years.
But Germany still lags.
Some residents could see negative effects by dragging their feet on this transition, leaving them without a backup plan if the euro becomes unstable again – due to terrorism or war – which could happen sooner or later because European problems never go away that quickly.
Is Bitcoin or Cryptocurrency taxable in Germany?
Yes, Bitcoin or cryptocurrency is taxable in Germany.
The German Federal Central Tax Office or Bundeszentralamt für Steuern (BZSt) treats bitcoin and other cryptocurrencies as private money for tax purposes.
Crypto is not treated as foreign currency, legal tender, nor property under the German Tax Acts.
The Federal Ministry of Finance (BMF) has also ruled that crypto transactions made by individuals are not subject to Value Added Taxes (VAT) for all EU member states.
The tax treatment of crypto trading falls under Section 22 of the Income Tax Act in Germany.
If you are trading cryptocurrency, your net amount gained or lost at the time of the sale is the relevant amount taxed as income.
It is a taxable sale whether you are trading one cryptocurrency for another crypto or if you are trading crypto into fiat currency (like into EUR).
However, if your crypto transactions are considered as financial instruments (such as swaps or futures), you may not be able to net your gains or losses against your passive crypto investments.
Is Cryptocurrency banned in Germany?
No, cryptocurrency is not banned in Germany.
The German Federal Criminal Police Office reported last month that digital currencies like Bitcoin are not expressly forbidden in the country.
They went on to state that investors and venture capitalists must abide by existing monetary regulations and know what they’re getting into when they invest in crypto or ICOs.
Germany is actually one of the strongest hubs for cryptocurrency in Europe, with Berlin home to several thriving Blockchain startups and meetup groups.
Is trading in cryptocurrency legal in Germany?
Yes, It is legal to trade in the cryptocurrency bitcoin in Germany.
The German Ministry of Finance has declared that Bitcoin and other cryptocurrencies are legally not foreign currency (referred for accounting purposes as “Currency A”), but rather private money.
Furthermore, no permission or government approval would be required to make or receive payments with cryptocurrency.
Cryptocurrency exchanges provide a digital market where you can buy and sell cryptocurrencies using FIAT – Wikipedia states:
These markets exist on every continent except North America and Antarctica.
They claim to offer various benefits such as lower fees than traditional online banking, the ability to use natural languages for transactions, the deep-liquidity order book method of trading priced at almost zero cost, and anonymity among participants to trade within the exchange.
Is investing in cryptocurrency legal in Germany?
Yes, but if the crypto is a security, it needs to comply with German securities law.
Some people might be wary about investing in cryptocurrencies because they consider them a Ponzi scheme or other scam.
However, you have nothing to worry about as long as the cryptocurrency you’re considering meets these criteria: The coin was created through a legitimate crowd sale that raised over 20 million USD where the coins were at one point discounted for early investors and bought directly from issuers.
Is mining cryptocurrency legal in Germany?
Cryptocurrency mining is legal in Germany.
However, the law applies to profits made from crypto mining so be aware of the tax implications.
Mining cryptocurrency utilizes electricity and can cause unpleasant conditions for people around the miner.
Noise, heat, increased risk of fire are all potential risks associated with home-mining that should be taken into consideration before purchasing or building a rig at home.
Is buying and selling cryptocurrency legal in Germany?
Yes, buying and selling cryptocurrency is legal in Germany.
The German Court of Justice has ruled in July 2017 that Bitcoin is treated as “private money”.
This means the purchase and sale of Bitcoin are not prohibited per se.
Germany, as a member of the European Union, is bound by regulations that should govern the legality of ownership and trading cryptocurrencies.
Is Cryptocurrency Legal in Germany – Final Thoughts
Cryptocurrency is legal in Germany, though caution should be taken as to not violate tax laws.
In July 2017, the world’s second-largest trading nation implemented a regulatory framework for bitcoins.
The new set of rules subjects bitcoins to capital gains tax and nationwide regulation.
As I mentioned earlier, you can get started by signing up for crypto exchange platforms supported in Germany such as:
In summary, bitcoin remains legal in Germany so long as it is treated as an asset, a financial instrument, or security rather than a currency.
If not classified correctly, its use becomes illegal and punishable by law.
However, you should always remain cautious when investing due to high volatility levels and scams happening.