Germany is issuing more authorizations under the European Union's Markets in Crypto Assets (MiCA) regulation than any other member state, and nearly all of the recently licensed entities are banking institutions seeking entry into the regulated crypto market. At the same time, Berlin's attempt to scrap a tax break for long-term cryptocurrency investments has run into resistance, forcing the government to put the plan on hold.

Germany Issues the Most MiCA Licenses in Europe as Banks Dominate

The Federal Republic has established itself as the leader in new authorizations under the now fully enforced MiCA framework, approving more firms under the current rules than any other EU member state, according to local crypto media citing official statistics.

In the third quarter alone, 42 organizations received approvals, the BTC Echo website reported on Wednesday, quoting a new report from FinPlanet, a digital-asset management consulting and compliance firm that published the survey this week. all of Europe, the total stood at 72, meaning Europe's largest economy and a major cryptocurrency market accounted for more than half of all new authorizations in the region.

The analysis was based on data sourced from Germany's Federal Financial Supervisory Authority (BaFin) and the European Securities and Markets Authority (ESMA).

All but one of the newly licensed entities are banking institutions, among them a number of cooperative banks, according to the crypto news outlet. Germany's Deutsche Bank is also in the group: the Frankfurt-headquartered banking and financial services giant obtained its regulatory approval under MiCA last month. The heavy involvement of credit institutions, from cooperative banks to Frankfurt's largest lender, underlines how the EU's unified licensing regime has become the entry point for traditional finance into the regulated crypto market.

Out of a total of 100 companies registered as crypto service providers (CASPs), 65 are banks, according to FinPlanet's CASP Radar report covering Q3 of 2026. German regulators authorized 58 institutions during the previous quarter, while another 120 firms licensed in other EU nations will be able to operate in Germany as well. Under MiCA's single-market passporting, an authorization in one member state allows providers to offer their services across the entire European Economic Area — the same mechanism that will bring those 120 foreign-licensed firms to Germany.

MiCA Licensing Slows Down Across Europe

The EU's MiCA regulation was passed by the European Parliament in April 2023 and formally adopted by the Council in mid-May of the same year. The comprehensive framework for digital assets and operations officially entered into force on June 29, 2023, with its publication in the Official Journal of the European Union.

However, it took another three years for the law to enter into full effect, as it was rolled out in several stages, including for stablecoins and other asset-backed tokens as well as CASPs in 2024. A transitional period allowing national governments in member states to transpose the legislation into domestic law and apply the pan-European rules ended on July 1, 2026. Since that date, all providers of crypto-related services in the European Economic Area (EEA), including the non-EU states Norway, Iceland, and Liechtenstein, must hold a MiCA license.

While the number of licensed entities rose to 363 during the studied period, growth in new authorizations slowed significantly from 105 in the second quarter. Not all applicants are granted regulatory approvals, as was the recent case with Bitcoin.de, one of the oldest and largest coin trading platforms in Germany and Europe. Earlier in October, BaFin rejected the MiCA application filed by its operator, futurum bank AG, part of Bitcoin Group SE. The future remains uncertain for the crypto marketplace, which serves more than 1 million users. The authorization figures published by BaFin and ESMA in the coming quarters will show whether the slower pace persists, and how regulators treat applications from established trading venues.

Berlin Delays Move to End Long-Term Crypto Tax Break

Over the past years, crypto investors have enjoyed favorable treatment in Germany, including a tax break for gains from investments in digital assets held for more than a year. Indications that the federal government in Berlin intends to abolish the exemption for long-term cryptocurrency investments have been mounting this year.

A bill drafted by the Finance Ministry aims to impose a 25% capital gains tax on all profits from crypto trading, regardless of the holding period, as Cryptopolitan reported in September. The proposed rate corresponds to the flat levy Germany generally applies to investment income, but it would remove the current incentive, enshrined in the tax code, to hold digital assets for longer than a year.

The coalition cabinet of Chancellor Friedrich Merz is now apparently postponing the decision, under public pressure and opposition from members of the ruling majority in the Bundestag. For as long as the bill stalls in the legislative process, the one-year exemption remains in force, leaving investors and the nascent banking-crypto segment to plan under rules that could still change.