Crypto Regulation in Motion: Greens Call for End to Bitcoin Tax-Free Holding Period, UK Accelerates Stablecoin Legislation

Political Debate Over Tax-Free Bitcoin Holding Period

The tax treatment of cryptocurrencies is once again on the agenda in the German Bundestag. The Greens are calling for the abolition of the Bitcoin holding period to close the so-called "crypto gap" ^[1]. In the Bundestag, discussion centers on a tax "crypto gap" that must be closed ^[1].

The political debate over the tax-free Bitcoin holding period is gaining momentum, with various parliamentary factions taking different positions ^[1]. Simultaneously, some factions are calling for the introduction of the digital euro—while others warn of surveillance and loss of control ^[1].

Regulatory Uncertainties in Germany

The tax treatment of cryptocurrencies in Germany is not yet clearly defined ^[1]. This creates uncertainty among investors and cryptocurrency users ^[1]. Beyond crypto taxation, cash is also under discussion, with the Union, AfD, SPD, Greens, and Left Party holding divergent positions ^[1].

The digital euro is being discussed as a public counterweight to private payment services ^[1], while the debate over the tax treatment of Bitcoin and other cryptocurrencies could have far-reaching consequences for investors ^[1].

United Kingdom Pursues Accelerated Stablecoin Regulation

While Germany's discussion focuses on taxation, the United Kingdom is pursuing a different regulatory approach. The British financial regulator FCA has identified the promotion of locally issued stablecoins as a central priority for 2026 ^[2]. Stablecoins are gaining significance worldwide, driving regulatory efforts ^[2].

The FCA is opening a new regulatory sandbox in which British stablecoin issuers can conduct secure experiments and pilot projects under real-world conditions ^[2]. In a press statement, FCA Chief Nikhil Rathi emphasizes: "Our reforms help the UK maintain its global competitiveness in our world-leading wholesale markets, attract international investment, and lead the way in innovation in financial services" ^[2].

Comprehensive Regulatory Framework Planned by 2026

By 2026, a comprehensive regulatory framework for stablecoins, trading platforms, lending, staking, and custody is to be completed in collaboration with the Bank of England ^[2]. The United Kingdom is pursuing incremental crypto regulation to balance innovation and consumer protection ^[2].

This approach has, however, faced critical evaluation from companies such as Consensys ^[2]. Consensys, the company behind MetaMask, argues that applying existing financial regulations has put the UK behind the US in international competition ^[2].

Legal Recognition of Digital Assets

Through the Property (Digital Assets etc.) Act 2025, digital assets are now explicitly defined and strengthened as a legally recognized form of property ^[2]. The FCA invites companies to apply by January for the stablecoin sandbox ^[2].

"Rapid technological change requires us to focus on outcomes rather than rigid rules," Rathi states. "We will continue to adapt our supervisory approach, tailor it more closely to the size and nature of firms, accept that mistakes will happen, and prioritize the most serious harms" ^[2].

Stablecoins are a type of cryptocurrency tied to the value of a traditional currency such as the US dollar and are intended to offer a more stable alternative to other cryptocurrencies like Bitcoin ^[2].