Germany: Moving towards a 25% cryptocurrency capital gains tax

Germany plans to impose a 25% flat tax rate on cryptocurrency gains, and U.S. Block applies for a federal banking license.

According to a document quoted by local media Die Welt on Wednesday, the German Ministry of Finance has drafted a bill that plans to impose a 25% tax on cryptocurrency gains starting in 2028. The move marks a major shift in the country's tax policy, as Germany previously fully exempted cryptocurrency gains held for more than twelve months. Meanwhile, thousands of kilometers away in the United States, Block, a company founded by Jack Dorsey, has filed an application with U.S. regulators seeking a federal banking license to host bitcoin and stablecoins. These two countries represent two very different paths to incorporating cryptocurrencies into common law systems.

Quick overview of key points

• Germany is about to end one of Europe's most favorable cryptocurrency tax regimes.
• Germany's tax system reform will not apply retroactively to all cryptocurrency holders.
• Meanwhile, the U.S. cryptocurrency industry is moving in the opposite direction, trying to integrate into the regulated banking system.

Proposed changes to Germany's cryptocurrency tax regime

If approved, the proposed change to Germany's cryptocurrency tax regime will take effect in 2028, with a plan to impose a flat tax rate of 25 percent on all assets. This policy will apply to all assets acquired after January 1, 2027. However, the terms will include a protection mechanism to ensure that assets purchased before this date will still be subject to current tax rules. In other words, this measure will not subvert everyone's established interests overnight, but it clearly changes the tax environment for all future cryptocurrency purchases.

Under the current system, cryptocurrency gains are fully tax-free after being held for more than twelve months. This makes Germany an attractive tax destination for current European holders. Finance Minister Lars Klingbeil announced at the end of April that Germany intends to review its cryptocurrency tax policy, with the expected goal of increasing additional tax revenue by $2.3 billion.

Zero cryptocurrency tax: The end of Europe's special status

The project marks a turning point after the country has built its reputation as a "cryptocurrency tax haven" within the European Union almost through convention. Holding a policy of full tax exemption after one year does not have the same generous reciprocity clause among its neighbors. This naturally attracts long-term investors seeking to optimize tax planning without leaving the EU.

There are still several areas of uncertainty. The Ministry of Finance has not yet responded to inquiries about the details of the text, and the timeline leaves a very narrow window between the reference acquisition date (January 1, 2027) and the formal implementation of the new tax system (2028). In addition, it remains to be seen how exactly this shift fits into the ongoing European cryptocurrency reporting rules, such as DAC8.

The United States is building a banking system for cryptocurrencies

It is here that the contrast becomes striking. When Germany tightened its cryptocurrency taxes, Block, a payment company founded by Jack Dorsey, formally applied for a license from the U.S. federal banking regulator, the Office of the Comptroller of the Currency (OCC), to create "Builders Bank & Trust." If approved, the structure will be responsible for hosting Bitcoin and stablecoins and providing digital asset services under a unified federal banking framework.

This is not a traditional bank with deposits and loans, but a structure focused on asset custody and digital financial infrastructure. Block is not alone, and several other major U.S. cryptocurrency companies are also pushing to gain regulated banking status in the United States. The movement reverses the historical logic of the industry-in the past, banks gradually integrated their Bitcoin services, but now Bitcoin companies themselves are building banks.

A key review of possible changes to Germany's cryptocurrency tax regime

Germany is preparing to impose a flat tax rate of 25% on cryptocurrency gains gained after January 1, 2027, which will apply from 2028, ending the policy of full tax exemption after one year of holding. A "grandfather clause" will protect assets purchased before this date from the new rules.

In the United States, Block (Jack Dorsey) has applied to the Office of the Comptroller of the Currency (OCC) for a federal banking license to host bitcoin and stablecoins, as part of a broader movement to incorporate the entire U.S. cryptocurrency industry into the banking system.

Two countries, two trajectories. Germany is closing Europe's most generous tax chapter on cryptocurrencies, while U.S. cryptocurrency companies are trying to become official banks. Standardization of the industry clearly follows different paths on both sides of the Atlantic.