LEGAL REGULATIONS OF CRYPTOCURRENCY IN GERMANY

Germany is one of the first countries in Europe, which drew attention to
the cryptocurrency and achieved at least some kind of legitimacy. Legal
regulation of the cryptocurrency in Germany began in 2013 by the Decree of the
Minister of Finance. Bitcoin is defined as a unit of account, which can be used
in trade relations of a private nature.

However, the cryptocurrency itself has not received the status of foreign
or electronic currency, but it has been defined as “private money”.
This suggests that, privately, you can make transactions with the crypto
currency, but there is still no regulation at the interstate level.

Since 2017, after the updating of the national regulatory framework, the
German Federal Government has designated Bitcoin as a “financial instrument”
(Rechnungseinheit).

CRYPTOCURRENCY TAXATION IN
GERMANY

Since transactions with cryptocurrency were privately recognized at the
legal level, this led to changes in the tax legislation: in cases where less
than 12 months have passed between the purchase and sale of the cryptocurrency,
an income tax is levied. If the period between the purchase and sale
transaction is over one year the income received from the sale of the crypto
currency is not a subject to taxation.

If we talk about the mining of the cryptocurrency and the tax on increasing
of the capitalmarket value, then this tax is not levied. This type of tax can
be applied only in relation to shares, bonds and other securities that were
acquired for the purpose of further resale in the market and obtaining material
benefits. Since Bitcoin mining is a process of creating the value of a currency
unit, it is taxed on income.

LICENSE FOR CRYPTOCURRENCY IN
GERMANY

Registration of cryptoexchange in Germany is a bit simpler than in other
countries.

Companies that link their activities to cryptocurrency operations in
Germany will be referred to financial companies.

Such companies are required to obtain the appropriate license and follow
its clear requirements:

·        
the authorized
capital of the company must be at least 730 thousand euros;

·        
tosubmit reports
timely to the Federal Office of Financial Supervision
(BundesanstaltfürFinanzdienstleistungsaufsicht (BaFin)).

In Germany, the center of the cryptocurrency is Berlin, where there is the
largest and most innovative Bitcoin community, called Bitcoin Kiez. This
business association, which combines the largest network of crypto-sites
throughout Europe, aims to promote and expand the influence of the crypto
currency, not only in Germany, but all over the world.

Germany is one of the legitimate countries in Europe with respect to
operations with cryptocurrency, and the registration of crypto exchanges will
not make any serious difficulties, since there is a clear set of regulations on
crypto-currency, in particular at this stage bitcoin is applied both in the
banking sector and for payment in retail trade networks.