After missing out on $3 billion in profits, Germany is strongly promoting Bitcoin: lawmakers call for an exemption from MiCA regulations.

As German lawmakers question whether the strictness of the EU MiCA framework could stifle innovation, the debate over Bitcoin regulation in Germany is escalating. The Alternative for Germany party (AfD) submitted a motion urging the government to exempt Bitcoin from the heavy taxation and strict regulations of the EU cryptocurrency market regulations (MiCA). The proposal defines Bitcoin as a “decentralized, unmanipulable, and limited” unique asset class, aiming to maintain Germany's digital financial sovereignty and global competitiveness. This move reflects a profound divergence among major European economies regarding the direction of digital euro, Bitcoin, and cryptocurrency regulation.

(Source: German Bundestag)

AfD Motion Core: Bitcoin Should Not Be Subject to MiCA Regulation

The latest motion from the Alternative for Germany (AfD), titled “Recognizing the Strategic Potential of Bitcoin - Maintaining Freedom through Tax and Regulatory Restraint”, posits that: Bitcoin should be regarded as a unique form of digital currency rather than a speculative asset, and therefore should not fall under the regulatory scope of MiCA.

The motion emphasizes the technological and monetary characteristics of Bitcoin, comparing it to “digital gold.” Lawmakers warned that excessive regulation and taxation could push capital and businesses abroad, undermining Germany's competitiveness and digital sovereignty in the field of digital assets.

The specific requests under discussion include:

1. Maintain the regulation of a 12-month tax-free holding period for Bitcoin.
2. Classify private mining and lightning network node operations as non-commercial activities.
3. Publish a strategic statement recognizing Bitcoin as the “digital currency of freedom in the 21st century” and consider its impact on energy policy, digital freedom, and monetary sovereignty.

Germany's MiCA Leadership and the Digital Euro Controversy

Despite the criticism of MiCA, Germany remains one of the most crypto-friendly jurisdictions in Europe and is at the forefront of implementing MiCA.

• The role of BaFin: The Federal Financial Supervisory Authority (BaFin) of Germany is responsible for overseeing all Crypto Asset Service Providers (CASPs) and enforcing Anti-Money Laundering (AML) and Know Your Customer (KYC) standards. Since MiCA comes into effect in December 2024, BaFin is responsible for issuing licenses to cryptocurrency custodians and trading platforms according to the EU's unified framework.
• Licensing status: BaFin has issued 9 MiCA licenses to date, more than any other European regulatory authority, including approvals granted to Boerse Stuttgart Digital Custody and fintech company Trade Republic.

However, the leadership of BaFin's defense of the digital euro stands in stark contrast to AfD lawmakers' support for Bitcoin. German central bank president Joachim Nagel has argued that the digital euro is crucial for maintaining Europe's financial sovereignty, while individuals including parliament member Joana Cotar believe that Bitcoin represents “personal financial sovereignty” and serves as a shield against inflation and excessive government intervention.

Missed Strategic Reserves: Lessons from Germany's Sale of Bitcoin

This debate has also been deepened by the German government's previous action of selling Bitcoin. In mid-2024, the German government, in accordance with legal requirements, sold nearly 50,000 Bitcoins that had been confiscated from criminal cases, generating approximately $2.9 billion.

However, by August 2025, the price of Bitcoin has doubled, meaning that the value of these holdings should have exceeded 6 billion dollars, missing out on more than 3 billion dollars in profits. This event prompted lawmakers like Cotar to urge the government to view Bitcoin as a strategic reserve asset rather than a volatile asset that needs to be liquidated.

Despite facing regulatory controversies and government missteps, Germany's encryption economy remains strong. Chainalysis data shows that between July 2024 and June 2025, Germany's encryption trading volume reached $219 billion, making it one of the largest markets in Europe. It is expected that by the end of 2025, Germany's encryption users will reach 27 million, and institutional participation is also on the rise, with Deutsche Bank preparing to launch digital asset custody services in 2026.

Conclusion

The intense discussion in Germany regarding Bitcoin regulation reflects the complex balance that major European countries must strike between pursuing financial innovation and maintaining traditional financial stability. The AfD's motion to exempt Bitcoin from MiCA regulation will undoubtedly compel the German government to reassess its strategic positioning on digital assets. The outcome of this debate will not only affect the status of Bitcoin in Germany, but will also provide important references for other European countries on how to define and regulate this unique asset class.