The use of cryptocurrency in Germany is increasing rapidly with Bitcoin and Ethereum being widely used in e-commerce to purchase goods.
Cryptocurrencies in Germany are regularly transferred and traded and companies have invested their capital in the new digital currency.
It is estimated that more than 2.1 million people – 2.62% of Germany’s total population – currently own cryptocurrency with Bitcoin as the leader.
The majority of German cryptocurrency owners are in the 18-34 age group (33%). Five per cent of them are 55 and above, meaning cryptocurrencies are largely owned by young, tech-savvy and affluent German residents.
Germany is, however, one of the few states in Europe that started to regulate the Bitcoin system.
The virtual currency regulation already exists and follows the German Banking Act (Kreditwesengesetz).
According to this rule, any person who conducts banking business or financial services for commercial purposes in Germany needs written authorisation by the German Federal Financial Supervisory Agency (GFFSA).
The GFFSA has classified digital currencies, in particular Bitcoin, as units of account in the sense of the German Banking Act.
It means that commercial Bitcoin platform operators – at least those established in Germany and/or those serving German customers – need a licence from the GFFSA under German law.
German tax authorities classify Bitcoin as an ‘economic asset’ (Wirtschaftsgut) that is then subject to income tax according to the German Income Tax Act (Einkommenssteuergesetz).
Germany, therefore, seems to be fertile soil for crypto companies. Some of the world’s most successful crypto companies found their place in German territory.
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The NAGA Group
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