Germany’s Member of Parliament (MP) Frank Schäffler has disclosed that the long-standing declaration which dictates that profits made from crypto staking and lending can only be sold tax-free after a ten-year hold period has been abolished.
Schäffler, who made this disclosure through a tweet on Friday, April 29, said that the German parliament reached a consensus on this after a roundtable discussion on crypto taxation.
— Frank Schäffler (@f_schaeffler) April 29, 2022
The parliament agreed to abolish this extant regulation which dictated that proceeds gotten through cryptocurrency staking or lending must be held for at least ten years only after which it can be sold tax-free.
With this declaration, Germany’s Federal Ministry of Finance has therefore said that a new law that reflects the country’s new stance of one year and no longer ten years for tax-free crypto selling would be drafted.
This recent pronouncement by the German parliament goes ahead to indicate Germany’s commitment to promoting the use and adoption of cryptocurrency and other digital assets as the average German would now be able to put his cryptocurrencies up for sale at a tax-free value after one-year staking or lending period.
According to a survey conducted by Coincub, the adoption of crypto in German has doubled in the past year, thereby pushing Germany ahead of Singapore to become the most crypto-friendly nation in the world.
With this escalating adoption of cryptocurrency, staking, and lending of crypto, a process that involves locking one’s cryptocurrencies for a timeframe in certain blockchain networks or platforms to earn passive income in the form of interest and rewards has also received great interest amongst Germans.
Germany on the Run to Becoming a Crypto Hub
While lots of countries are still contemplating which side of the crypto fence is best for them, with some stirring up conversations around central bank digital currencies (CBDCs) and crypto regulations, Germany on the other hand is surprisingly changing its gear in a forward motion.
Commerzbank which is one of the biggest banks in Germany recently sent in its application to the BaFin financial regulator, requesting a license to trade and keep custody of crypto. Some other Banks in Germany have however started looking in the direction of creating Blockchain-based applications which would enable cryptocurrency trading and other functionalities.