The world’s wealthiest country is warming to cryptocurrency. According to a report by KuCoin, which presented some encouraging facts about the future of cryptocurrency in Germany, this is the case.
Notably, 44% of Germans are “inspired to participate in cryptocurrencies to be a part of ‘the future of finance,'” while 37% of German crypto investors have been trading for more than a year.
The report’s publisher, KuCoin, is led by Johnny Lyu, who explains:
“Cryptocurrencies are quite popular among accumulation strategy proponents, particularly among the younger generation. They would rather save for retirement on their own and diversify their portfolio with cryptocurrency.”
“Despite Germans’ tremendous demand for cryptocurrencies, the country still lacks explicit legislation that unequivocally restricts the usage of digital money,” Lyu cautions.
According to the paper, Germany was the first country to “acknowledge that Bitcoins are ‘units of value’ and can be categorised as a ‘financial instrument.'” The local authority has only had “some success in controlling cryptocurrency” thus far.
Germany is a role model for other EU nations
On the other hand, Germany was the first government in the world to establish a blockchain strategy, and, interestingly, Germany’s political position on cryptocurrencies was debated during recent legislative elections.
“Germany is a role model for other EU nations, whose populace is more open to long-term investments,” says Florian Döhnert-Breyer, managing director of F5 Crypto. In addition, “Germany has a specific role to play as the EU’s largest country. With a generally risk-averse attitude of financial assets”. He goes on to say that:
“The significant percentage of women interested in crypto is particularly encouraging. Given this demographic is less involved in the financial system (for example, the stock market).”
According to the survey, “men account for 69% of crypto investors, whereas women account for 53% of the crypto-curious”. That indicates that women are more interested in the future of finance than traditional finance, according to Döhnert-Breyer.
Younger demographics are more conscious of inflation concerns
“Younger demographics demonstrate more self-directed and equity-focused investment style. And are often much more conscious of inflation concerns in particular,” says Katharina Gehra, CEO and Co-Founder of Immutable Insight.
The future, however, remains unpredictable, particularly in terms of the regulatory environment, as “BaFin never tyres of warning about the hazards”. BaFin is Germany’s Federal Financial Supervisory Authority, which is in charge of crypto regulation. They just approved neobank N26’s plan to offer crypto trading in 2022.
Döhnert-Breyer is optimistic that Germany would pursue crypto-friendly legislation in the future, and BaFin’s recent measures. Such as issuing custody licences and Bitcoin-based security tokens, are encouraging signals. “There is some progress on the legislative side,” adds Gehra, when comparing Germany to Switzerland and the United Kingdom.
“By allowing special funds for investing in digital assets last year, Germany took the first official step towards accepting crypto investments. I believe the country has laid a solid foundation for creating a welcoming environment for cryptocurrency users.”