How to Buy Crypto in Germany

Bitcoin, Ethereum, and other crypto assets have long been part of everyday life, and more and more Germans are adding them to portfolios. However, it is worth understanding the legal nuances before buying crypto.

Below is a detailed guide in the German style: it is practical and down-to-earth. We will tell you about purchasing methods and their pros and cons, and share a detailed guide on how to buy cryptocurrency with a card in a couple of clicks.

Is It Legal to Buy Cryptocurrencies in Germany?

Yes, it is legal to buy crypto in Germany. At the EU level, the MiCA regulation came into force in June 2023 and is being implemented in stages. First, the provisions on stablecoins came into force, and the main regime part for crypto-asset service providers (CASP) became effective.

However, it is important to note that at the national level, Germany does not consider crypto assets as legal tender. In addition, BaFin (Federal Financial Supervisory Authority) regulates cryptocurrency activities in Germany. It actively monitors exchanges and their activities within the law framework. To operate within the legal framework, service providers and exchanges must comply with the KYC (Know Your Customer) procedure and AML (Anti-Money Laundering) rules.

So, it follows that activities such as exchange management or storage require authorization and supervision by BaFin. These rules provide a unified roadmap for investor protection, but it is not mandatory to use only regulated platforms; many Germans also use unlicensed platforms without any problems.

Ways to Buy Crypto in Germany

You can select the best choice for purchasing cryptocurrency once you are aware of the legislation specifics. Since there are numerous practical approaches, let's examine each one in more detail and from various perspectives.

CEX (Centralized Exchanges)

A centralized exchange is an online platform that simplifies entry into cryptocurrency for beginners thanks to its advanced training system. Nowadays, CEX is one of the most popular ways to buy crypto, as these platforms offer all the tools needed to work with crypto, including trading, staking, withdrawals to bank account, cryptocurrency conversion and transfers.

Pros: wide selection of coins, convenient on-ramp features,user-friendly interface.

Cons: mandatory KYC.

P2P Platforms

P2P (peer-to-peer) trading is a method where you buy directly from another user. In this case, the platform acts as an intermediary, blocks the coins in escrow, and releases them after payment confirmation. You set up filters, select an offer from a verified seller, and strictly follow the instructions.

Pros: flexible payment methods, attractive rates.

Cons: speed depends on the counterparty, risk of fraud.

Crypto Brokers

A crypto broker is an online platform that simplifies the process of trading digital assets for users. Crypto brokers offer intuitive interfaces that interact with the exchange on your behalf.

A broker is a popular alternative to crypto exchanges and P2P in the country because brokers provide professional assistance. However, the big downside is that some brokers charge high fees (1% or more of the transaction amount).

Pros: intuitive interface, professional help.

Cons: high fees, often storing crypto only within the service.

Step-by-Step Guide: How to Buy Crypto in Germany

To ensure that your cryptocurrency purchase in Germany goes smoothly, we have prepared a comprehensive and detailed guide for you. Read it and follow each step to successfully achieve your goal.

Step 1: Choose a regulated platform available to users in Germany.

Step 2: Register and complete KYC.

Step 3: Make a purchase. Here we will describe in more detail the purchasing process on each platform, and you will select the most convenient option to buy cryptocurrency.

Step 1: Choose a Platform

When choosing a platform, pay attention to transparent rates and convenient payment methods. If you are a beginner, select a platform with a simple interface; if you are an experienced trader, find a platform for active trading with a deep order book and a reliable matching system.

For example, the Cryptomus exchange is an excellent option; it is an online platform with a user-friendly interface, allowing you to easily find any tab you need. More than 120 cryptocurrencies are available on the exchange for trading, and more than 40 fiat currencies are available for depositing funds into your wallet.

Step 2: Pass the KYC Verification

After registration, you need to pass KYC verification. This will give you access to financial transactions on the platform.

To confirm your identity, you will first need to take a selfie and then photograph your ID document. Next, upload both files to the site. Wait for confirmation of the procedure from the moderator.

Step 3: Choose the Most Convenient Way to Buy Cryptocurrency

CEX

After registering and passing KYC verification, you need to top up your account with euros. You can do this via bank transfer. Next, when the money is in your account, buy the selected cryptocurrency. The process is simple: select the desired crypto and specify the amount you want to purchase. Next, input your card information and verify the transaction with the 2FA code.

P2P Platform

To make a purchase on your chosen P2P exchange, first set the necessary filters: the amount of cryptocurrency you want, the fiat currency (like euros) you are willing to spend on the purchase, and the most convenient payment method.

After setting up the filters, you will see a list of offers from sellers. Select the most suitable one and contact the potential trading partner to discuss the details. We recommend that you only make deals with verified sellers to minimize the risk of fraud. If you don't find a suitable offer in the list, create your own and wait for a response.

Crypto Brokers

After completing the KYC procedure, you will be able to deposit euros into your account. Go to the “Buy” tab, then select the cryptocurrency you want to buy (e.g., Bitcoin or Ethereum), specify the amount in euros, and confirm the transaction. The broker conducts the transaction at the market rate with a small service fee, which is usually higher than the exchange commission.

The purchased cryptocurrency will appear in your account immediately. However, keep in mind that many brokers do not allow withdrawals to external wallets, which means that you store your assets in their ecosystem.

Simple Way to Buy Crypto with Your Credit Card

If you are looking for the easiest way to buy cryptocurrency in Germany, use your bank card. The process is as follows (using Cryptomus as an example).

Step 1: Register on the Cryptomus Platform

The registration process will take you just a few minutes, as you can log in using the most convenient method, including Telegram, Facebook, or Google. At this stage, enable 2FA to protect your data and money from potential hacking by fraudsters.

Step 2: Complete the KYC Verification

The Cryptomus platform follows AML policy and adheres to high security measures, so KYC verification is a necessary part of the registration process. This will allow you to access financial transactions within the platform.

To complete verification, go to the “Settings” section. Then click on the KYC verification button, which is the third item in the list. Take a photo of your ID and a selfie, then upload these files to the platform. This procedure allows the platform to verify that you are a real person and confirm your verification.

Step 3: Return to the Dashboard and Click “Receive”

Fill in all your criteria: select the desired cryptocurrency to buy and a suitable network. Then choose “Fiat” as a type of receive option when you’re buying any crypto with a debit or credit card.

Step 4: Fill in the Details

Click on “Receive via Mercuryo” and fill in the gap with the amount you’re going to pay in the preferred currency. The receiving amount of cryptocurrency will be automatically calculated in the payment form.

Step 5: Confirm Your Purchase

Next, fill in your email address for getting a verification code, and enter your debit or credit card details to make a purchase.

Well done! You’ve just bought cryptocurrency with a card without any complications. The funds will be credited to your personal wallet soon!

Do You Have to Pay Taxes on Cryptocurrency Investments?

In Germany, crypto investments are not taxed, but if you decide to sell your savings, these actions are subject to taxation. If a company or individual wishes to accept payment in cryptocurrency, payment for goods and services in crypto is also considered a sale of an asset at market price at the time of payment; exchanging one coin for another is also a sale. Each such exchange "resets" the holding period for the new asset—the year starts over again. These nuances are clearly described in the BMF guidance.

As for VAT, fiat and cryptocurrency exchange services in the EU are exempt from it according to the decision of the Court of Justice of the European Union in the Hedqvist case: exchanging cryptocurrency for traditional currency is equated with currency exchange. At the same time, VAT is still levied on the sale of goods/services by the seller, regardless of whether you pay in euros or cryptocurrency.

Unlicensed exchanges may not require taxes, as authorities have no access to them. However, there's a downside: withdrawing funds to fiat currency can be difficult. This is because authorities may raise questions about the origin of the funds, in which case taxes will have to be paid.

It is important to note that EUR 1,000 is an exemption threshold: if exceeded, the entire amount of profit is taxed, not just the "extra" EUR 1. For context: prior to the 2023 assessment period, the threshold was EUR 600; it was then raised. Before trading, we recommend that you carefully study the tax rate and amount, as the data may change.

Buying cryptocurrency in Germany is a fairly simple process if you learn the basic rules in the legislation and follow them. It is also important to take a responsible approach to trading and storing cryptocurrencies. To do this, choose reliable platforms such as Cryptomus.

If you have any questions, please text us on email or Telegram. We will be happy to help!