Is crypto legal in Germany? Rules & regulation (2026)
Crypto is regulated in Germany.
Crypto is fully legal in Germany and is comprehensively regulated. Since 30 December 2024 the EU-wide MiCAR regime applies, with the national KMAG giving BaFin enforcement powers and transitional rules; Germany's earlier KWG crypto-custody licence and the eWpG framework for tokenised securities remain part of the stack. The 12-month national grandfathering for KWG-licensed crypto firms expired on 31 December 2025, so CASPs now operate in Germany only with a MiCAR authorisation (or by EU passport).
Legal framework
EU Markets in Crypto-Assets Regulation (MiCAR, Regulation (EU) 2023/1114) implemented nationally by the Kryptomärkteaufsichtsgesetz (KMAG, published in the Federal Law Gazette 27 Dec 2024); supplemented by the Banking Act (KWG), the Electronic Securities Act (eWpG, in force since 10 June 2021) and the AML Act (GwG). Competent authority: BaFin, with the Deutsche Bundesbank co-involved for prudential supervision.
Status by sub-area
Stablecoins
In forceMiCAR Titles III (ARTs) and IV (EMTs) have applied since 30 June 2024. Issuers must be EU-established credit institutions or, for EMTs, e-money institutions; BaFin authorises and supervises German issuers. The first euro EMT (AllUnity) was authorised by BaFin in August 2025.
Exchanges / VASP
In forceCrypto-asset service providers (incl. exchanges, brokers, OTC desks) need a MiCAR authorisation under Art. 62, supervised by BaFin under MiCAR + the KMAG. National KWG-only crypto licences ceased to provide a market gateway after the 12-month German grandfathering ended on 31 December 2025.
Token Offerings
In forceToken classification follows German/EU securities law: 'security tokens' are financial instruments under WpHG/MiFID II and the eWpG, while non-security utility/payment tokens fall under MiCAR's white-paper regime. BaFin actively classifies tokens on a case-by-case basis.
Custody
In forceCrypto custody is a fully regulated activity. New custodians apply for a MiCAR CASP authorisation (Annex IV Class 2: €125k initial capital plus 25% of fixed overheads) supervised by BaFin; the legacy KWG 'crypto-custody business' licence (in force since 1 January 2020) was a national world-first but its market access ended with the German grandfathering on 31 Dec 2025.
DeFi
PartialMiCAR Recital 22 excludes 'fully decentralised' crypto-asset services without an identifiable intermediary, but the threshold is not defined — BaFin assesses on a case-by-case basis. Front-ends, governance-token issuers, or services with identifiable operators can still fall under MiCAR/KWG. ESMA Level 2/3 guidance and a possible MiCA II are expected to close the gap.
Still pending: ESMA guidance and potential MiCA II pending to define 'fully decentralised' DeFi threshold
Tax
In forceCrypto is treated as 'other economic goods' (sonstige Wirtschaftsgüter), not currency. Private investors enjoy a 1-year holding exemption under § 23 EStG; sales within a year are taxed at the personal income-tax rate (up to 45%) above the €1,000 annual Freigrenze. The BMF circular of 6 March 2025 sets detailed rules including for staking, lending, airdrops and NFTs.
How to get a crypto license in Germany
To provide crypto-asset services in Germany you need a MiCA CASP authorisation (Crypto-Asset Service Provider), supervised by the Federal Financial Supervisory Authority (BaFin), under the EU Markets in Crypto-Assets Regulation (MiCA), Title V.
- Authority
- the Federal Financial Supervisory Authority (BaFin)
- License required
- a MiCA CASP authorisation (Crypto-Asset Service Provider)
- Framework / law
- the EU Markets in Crypto-Assets Regulation (MiCA), Title V
- Minimum capital
- €50,000–€150,000 minimum, by service class (Class 1/2/3)
- Timeline
- about 40 working days of substantive review; 1–3 months for a well-prepared application
- Cost
- an application fee of roughly €5,000–€25,000, plus ongoing supervisory fees
- Passporting
- Yes: a single MiCA CASP licence passports across all 27 EU member states.
What a crypto license in Germany covers
- Custody and administration of crypto-assets for clients
- Operating a trading platform for crypto-assets
- Exchanging crypto-assets for funds, or for other crypto-assets
- Executing orders for crypto-assets on behalf of clients
- Reception and transmission of orders, and placing of crypto-assets
- Advice and portfolio management on crypto-assets
- Transfer services for crypto-assets on behalf of clients
Step by step: getting a crypto license in Germany
Incorporate a legal entity with a registered office in the member state, with at least one director resident in the EU.
Build the application file: programme of operations, business plan, governance, AML/CFT, ICT resilience and client-asset segregation.
Submit the application to the national competent authority.
Completeness check: the authority has 25 working days to confirm the file is complete and request anything missing.
Substantive assessment: the authority has 40 working days to grant or refuse the authorisation.
Once authorised, notify the passport to the host member states you intend to serve, then begin operating across the EU.
Documents required in Germany
- Programme of operations describing each crypto-asset service you will provide
- Business plan with three-year financial projections
- Evidence of prudential safeguards (own funds or qualifying insurance)
- Governance arrangements, organisational chart and internal-control description
- AML/CFT policies and the appointment of a compliance officer
- ICT security, business-continuity and DORA-aligned resilience policies
- Custody and client-asset segregation arrangements
- Complaints-handling procedure and conflict-of-interest policy
- Fit-and-proper evidence for directors and qualifying shareholders (CVs, criminal-record certificates)
Ongoing obligations in Germany
- Maintain prudential safeguards and own funds at or above the class minimum
- Keep client crypto-assets segregated from the firm's own assets
- Run continuous AML/CFT monitoring, screening and suspicious-activity reporting
- Keep marketing communications fair, clear and not misleading
- Operate complaints handling and manage conflicts of interest
- Meet ICT resilience and incident-reporting duties under DORA
- File periodic reports to the national competent authority
Key points: crypto & digital assets in Germany
MiCAR is the primary in-force regime
MiCAR Titles III-VI applied from 30 December 2024. BaFin is the national competent authority; CASP authorisation applications go to casp-authorisation@bafin.de (Art. 62 MiCAR) with Bundesbank involvement.
National implementing law: KMAG
The Kryptomärkteaufsichtsgesetz (Crypto-Markets Supervision Act) was published in the Bundesgesetzblatt on 27 December 2024; it integrates MiCAR into German supervisory law and gives BaFin powers including the simplified procedure under § 50(3) KMAG / Art. 143(6) MiCAR.
Grandfathering ended 31 Dec 2025
Germany used the shortest national grandfathering window (12 months, not the 18-month EU maximum). Firms previously licensed under the KWG for crypto custody had to obtain a MiCAR CASP authorisation by 31 December 2025 to continue operating in Germany.
Tokenised securities under the eWpG
BaFin already approved euro stablecoin
On 1 August 2025 BaFin approved AllUnity (Deutsche Bank DWS / Flow Traders / Galaxy Digital JV) as Germany's first MiCAR-authorised euro EMT issuer, illustrating that the EMT/ART regime is fully operational.
Tax: one-year private-holding exemption preserved
Under § 23 EStG, private individuals' crypto gains are tax-free if held > 1 year; if sold within a year, gains above the €1,000 Freigrenze are taxed at the personal income-tax rate (up to 45% + solidarity surcharge). BMF's updated circular of 6 March 2025 sets out reporting/documentation rules and addresses DeFi/staking.
Crypto license in Germany: FAQ
Do you need a license to run a crypto business in Germany?
Yes. To provide crypto-asset services in Germany you need a MiCA CASP authorisation (Crypto-Asset Service Provider), supervised by the Federal Financial Supervisory Authority (BaFin), under the EU Markets in Crypto-Assets Regulation (MiCA), Title V.
Which authority issues crypto licenses in Germany?
The Federal Financial Supervisory Authority (BaFin).
How much does a crypto license cost in Germany?
An application fee of roughly €5,000–€25,000, plus ongoing supervisory fees.
How long does it take to get a crypto license in Germany?
Typically about 40 working days of substantive review; 1–3 months for a well-prepared application.
What documents do you need for a crypto license in Germany?
The application file centres on programme of operations describing each crypto-asset service you will provide; business plan with three-year financial projections; evidence of prudential safeguards (own funds or qualifying insurance); governance arrangements, organisational chart and internal-control description; plus fit-and-proper evidence for directors and qualifying shareholders.
What is the application process for a crypto license in Germany?
Incorporate a legal entity with a registered office in the member state, with at least one director resident in the EU. Build the application file: programme of operations, business plan, governance, AML/CFT, ICT resilience and client-asset segregation. The authority then assesses the file and, once authorised, you can begin operating.
Does a Germany crypto license work in other EU/EEA countries?
Yes: a single MiCA CASP licence passports across all 27 EU member states.
Timeline of decisions
- Law
- Law · officialGerman MiCA grandfathering window for crypto firms expires
Germany chose a strict transition: crypto-asset service providers holding old KWG licenses had to obtain a MiCA CASP authorisation by year-end or cease operating, well ahead of the EU-wide 1 July 2026 backstop. By December 2025 BaFin had granted the most CASP licenses of any EU member state (around 27).
BaFin
- Law · officialDORA digital operational resilience rules apply to crypto firms
The EU Digital Operational Resilience Act, implemented in Germany via the FinmadiG, became applicable, imposing ICT risk-management, incident-reporting and governance requirements on crypto-asset service providers alongside other financial entities.
BaFin
- LawBundestag passes Financial Market Digitalisation Act (FinmadiG)
Parliament adopted the FinmadiG, whose centerpiece is the new Crypto Markets Supervision Act (KMAG) implementing MiCA and DORA into German law, defining BaFin's powers, sanctions and a grandfathering regime running to 31 December 2025.
Mayer Brown
- Decision · officialFederal Fiscal Court confirms crypto gains are taxable
The Bundesfinanzhof ruled that cryptocurrencies are 'other economic assets' and that profits from sales within a one-year holding period are taxable as private sales under the Income Tax Act, rejecting claims of an unconstitutional enforcement deficit. Gains after one year remain tax-free.
Library of Congress
- Law · officialCrypto Fund Units Regulation (KryptoFAV) takes effect
The KryptoFAV extended the Electronic Securities Act to allow investment fund units to be issued as crypto securities recorded on distributed ledgers, broadening tokenisation beyond debt instruments.
BaFin
- Law · officialElectronic Securities Act (eWpG) enters into force
Germany enabled purely electronic securities without paper certificates, creating 'crypto securities' registered on DLT and making crypto-securities registry-keeping a BaFin-supervised financial service, a core part of the federal blockchain strategy.
BaFin
- Guidance · officialBaFin issues guidance on crypto custody business
BaFin published its guidance notice detailing the statutory definition of crypto custody business under section 1(1a) KWG and the requirements for the new licensing regime.
BaFin
- Law · officialCrypto custody becomes a licensed financial service under the KWG
Implementing the EU's 5th Anti-Money-Laundering Directive, Germany added 'crypto assets' as a financial instrument and created a new crypto custody business requiring BaFin authorisation (minimum capital €150,000), making Germany an early mover in formally licensing crypto custodians.
BaFin
- Guidance · officialFederal Government adopts national Blockchain Strategy
The Cabinet approved a blockchain strategy across five fields of action, signaling support for the technology and tokenised securities while explicitly rejecting private stablecoins (e.g. Libra) as alternatives to sovereign currency. It set the agenda for the eWpG and crypto regulation.
Bundesregierung
- Guidance · officialBaFin classifies Bitcoin as 'units of account' / financial instruments
In a published expert article, BaFin took the position that Bitcoin are 'units of account' and therefore financial instruments under section 1(11) KWG, meaning commercial trading could require authorisation, Germany's foundational regulatory stance on crypto.
BaFin
Sources
- bafin.de/EN/Aufsicht/MiCAR/MiCAR_node_en.html
- eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32023R1114
- bafin.de/EN/Aufsicht/BankenFinanzdienstleister/Markteintritt/Kryptoverwahrgesc
- bafin.de/EN/Aufsicht/FinTech/Geschaeftsmodelle/DLT_Blockchain_Krypto/Kryptower
- bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Steuerarten/Einkommensteuer/2025-0
- globallegalinsights.com/practice-areas/blockchain-cryptocurrency-laws-and-regulations/germany
- klardenker.kpmg.de/financialservices-hub/umsetzung-der-mica-regeln-das-kryptomaerkteaufs
- fin-law.de/en/2025/04/22/micar-transition-what-are-bafins-obligations-towards-ca
- crassula.io/guides/licenses/germany-crypto-custody/
- bafin.de/EN/Aufsicht/FinTech/Geschaeftsmodelle/DLT_Blockchain_Krypto/Kryptotok
- simmons-simmons.com/en/features/tax-on-cryptocurrency/clb0yer100070tqc0x1uvmwct/how-germa
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