Germany: Moving Toward a 25% Crypto Gains Tax

The Ministry of Finance in Germany has drafted a bill to impose a 25% tax on crypto gains starting in 2028. This, according to a document consulted by the local media Die Welt on Wednesday. A significant change for a country that has so far completely exempted crypto gains held for more than twelve months. At the same time, thousands of kilometers away, Block, Jack Dorsey’s company, has submitted an application for a federal banking charter to the US authorities to custody bitcoin and stablecoins. Two countries, two radically different ways to bring crypto into common law.

The Proposed Change to the Crypto Tax Regime in Germany

Effective in 2028 if approved, the proposed change to the crypto tax regime in Germany plans for a flat tax of 25%. This will apply to all assets acquired after January 1, 2027. A clause would however protect assets purchased before this date, which would remain subject to current tax rules. In other words, the measure does not reshuffle the deck for everyone overnight, but it clearly changes the game for all future crypto purchases.

Under the current regime, gains on cryptos become fully tax-exempt after holding for more than twelve months. This therefore makes present-day Germany a particularly attractive tax destination for holders in Europe. The Finance Minister, Lars Klingbeil, had already announced at the end of April the country’s intention to review its crypto taxation. With an expected additional tax revenue target of 2.3 billion dollars.

Zero Crypto Tax: The End of a Special Status in Europe

This project marks a turning point for a country that had built, almost by default, a reputation as a crypto tax haven within the European Union. The total exemption after one year of holding had no equivalently generous counterpart among its neighbors. This naturally attracted long-term investors seeking to optimize their taxation without leaving the EU.

Several areas of uncertainty remain at this stage. The Ministry of Finance has not yet responded to inquiries on the details of the text, and the timeline leaves a narrow window between the reference acquisition date of January 1, 2027, and the effective enforcement of the new tax in 2028. It also remains to be seen how this shift will be precisely articulated with the European crypto tax reporting rules already being rolled out, such as DAC8.

The United States Are Banking Cryptocurrencies 

And this is where the contrast becomes interesting. While Germany tightens its crypto taxation, Block, the payments company founded by Jack Dorsey, has officially requested a charter from the Office of the Comptroller of the Currency (OCC), the US federal banking regulator, to create “Builders Bank & Trust”. If approved, this structure would be responsible for holding bitcoin and stablecoins. But also, to offer digital asset services under a unified federal banking framework.

It would not be a traditional bank with deposits and loans. But a structure focused on asset custody and digital financial infrastructure. And Block is not alone in this field as several other major American crypto companies are also pushing to obtain a regulated banking status in the United States. This movement reverses the sector’s historical logic, where banks gradually integrated bitcoin into their services. Now, it is Bitcoin companies themselves building the banks.

What to Remember About the Possible Change to the Crypto Tax Regime in Germany?

• Germany is preparing a flat 25% tax on crypto gains acquired after January 1, 2027, applicable from 2028, ending the total exemption after one year of holding.
• A “grandfathering” clause would protect assets purchased before this date from the new rules.
• In the United States, Block (Jack Dorsey) has requested a federal banking charter from the OCC to custody bitcoin and stablecoins, in a broader movement to bank the American crypto sector.

Two countries, two trajectories. Germany is closing the most generous tax chapter in Europe for crypto, while American crypto companies seek to become fully-fledged banks. The normalization of the sector clearly does not follow the same path on both sides of the Atlantic.