BMF gets crypto regulation rolling

The Federal Ministry of Finance is removing the ten-year retention period extension for cryptocurrencies used for staking and lending. This was announced yesterday, April 28, 2022, at the first blockchain roundtable of the FDP parliamentary group.

According to this, cryptocurrencies used for staking or lending can be sold tax-free after one year in the future. The Federal Ministry of Finance will soon publish a corresponding draft for a letter from the Federal Ministry of Finance. From now on, it will serve as a guideline for the German tax authorities. The old federal government under the CDU and SPD had published a letter from the Federal Ministry of Finance last summer in which they wanted to stick to the holding period of ten years.

Writing on other areas of crypto is expected to follow this year, industry officials who attended the event tell BTC-ECHO. After years of legal uncertainty, the Federal Ministry of Finance under the FDP is finally getting the regulation of crypto rolling in Germany. The scene cheers.

“This is a very important step,” explains the FDP member of the Bundestag Frank Schäffler to BTC-ECHO. He initiated his party’s first blockchain roundtable. “With this draft, the Federal Ministry of Finance is sending a strong signal to the crypto industry in Germany, especially when it comes to staking and lending.”

Industry surprised by staking decision

A total of over 50 guests were invited to the Blockchain Roundtable in the Bundestag to discuss the draft of the Federal Ministry of Finance, including FDP MPs, members of the BMF and leading blockchain experts from German-speaking countries, for example von Bitpandaan Austrian crypto exchange.

“The surprise about the new letter was very big,” explains crypto tax expert Werner Hoffmann to BTC-ECHO. He is co-founder of the crypto tax law firm Pekuna. “I didn’t expect, after several discussions with the Treasury, that they would deviate from the old line. I see it as very positive that she approaches the community with open ears. The design exceeded my expectations.”

DeFi specialist Peter Großkopf is also euphoric. “The BMF critically dealt with the feedback from the community in advance and made changes,” the founder of the DeFi platform Unstoppable Finance told BTC-ECHO. “It is very welcome that the new federal government and the FDP regime in the Federal Ministry of Finance want to strengthen Germany as a crypto location.”

For commercial staking, there is still a need for discussion

For the German industry, it is not just a victory in the areas of staking and lending. In the draft of the BMF letter, which is available to BTC-ECHO, clear general definitions for basic crypto terms, such as consensus algorithms, are presented for the first time. “Knowing what to expect in this area is already positive, even in the case of disadvantageous regulations,” says Werner Hoffmann. For many issues, however, there is still a long way to go before complete legal clarity is achieved.

“In particular, the area of ​​commercial staking will again lead to discussions,” believes Hoffmann. “Also, the scope of the writing could be expanded to include some topics. Nothing will be in there on NFTs and DeFi protocols.” Peter Großkopf wants to work to ensure that “solutions that are acceptable to citizens, entrepreneurs and the state are created here.” In order to stay on the ball in the field of DeFi, you will “probably need a continuous process in the future”, according to the entrepreneur.

Further BMF letter announced

There are also still ambiguities in the documentation and reporting requirements for crypto transactions that need to be resolved in the future. “Frank Schäffler took up the example that he would never pay for his coffee with crypto in Germany. Currently he would have to report this to the tax office. The documentation effort is too high,” says Werner Hoffmann.

According to the expert, Germany needs a small-value regulation or a rule that crypto-to-crypto transactions are tax-free. According to him, the Federal Ministry of Finance wants to dedicate a separate letter to the topic in autumn 2022. However, advances of this kind would also require concrete changes in the law, which are not at all within the scope of the BMF.