Rhode Island Proposes Bitcoin Tax Exemption as Germany's DZ Bank Secures Crypto Trading License

Two significant regulatory developments are shaping the cryptocurrency landscape on opposite sides of the Atlantic, with U.S. state legislators pursuing tax relief for Bitcoin users while European banks expand digital asset services under new continental regulations.

Rhode Island's Tax Exemption Initiative

Rhode Island lawmakers have put forward legislation for the second consecutive year that would temporarily exempt modest Bitcoin transactions from state income taxes. Senate Bill S2021, introduced on January 9 by Senator Peter A. Appollonio, would allow residents and Rhode Island-based businesses to exclude qualifying Bitcoin transactions from state income and capital gains taxes ^[1].

The proposed exemption establishes a monthly cap of $5,000 and an annual limit of $20,000 for tax-free Bitcoin transactions ^[1]. The bill specifically defines Bitcoin as a digital, decentralized currency based on blockchain technology and applies to both individual residents and businesses operating primarily within the state ^[1].

Under the proposal, taxpayers would self-certify their eligibility on annual state tax returns without reporting individual transactions, though they must maintain records demonstrating compliance with annual limits. These records would only be required if the state requests them during an audit ^[1].

The Rhode Island Department of Business Regulation would be tasked with issuing plain-language guidance on acceptable recordkeeping practices and valuation methods, utilizing publicly available Bitcoin price indices to determine market value at transaction time ^[1].

Notably, the exemption carries a built-in expiration date. If enacted, it would take effect January 1, 2027, and sunset on January 1, 2028, unless the General Assembly extends or amends it after reviewing fiscal and economic impacts ^[1]. Legislators have characterized the measure as a practical program designed to treat digital money more like traditional currency for everyday transactions rather than speculative investments ^[1].

Germany's Banking Sector Embraces MiCAR

Across the Atlantic, Germany's second-largest lender DZ Bank has obtained authorization under the European Union's Markets in Crypto-Assets Regulation, enabling the launch of retail cryptocurrency trading throughout Germany's cooperative banking network ^[2].

The German Federal Financial Supervisory Authority, known as BaFin, granted the MiCAR license at the end of December ^[2]. This approval allows DZ Bank to deploy "meinKrypto," a digital asset trading platform designed for customers of Volksbanken and Raiffeisenbanken, the country's cooperative bank network ^[2].

The platform will function as both a wallet and trading interface for self-directed investors, initially supporting Bitcoin and other cryptocurrencies, with additional assets potentially added later pending regulatory review ^[2]. Each cooperative bank must submit its own MiCAR notification to BaFin before activating the service for customers ^[2].

The implementation follows a decentralized approach, with each cooperative bank deciding independently whether to offer crypto trading based on individual strategy and risk assessment ^[2]. Customers will be able to buy, sell, and hold digital assets without using external exchanges, maintaining all activity within the regulated banking system ^[2].

The technical infrastructure was developed by Atruvia, the IT provider for the cooperative financial group, partnering with DZ Bank, while Stuttgart Stock Exchange Digital will provide crypto custody services under German and EU regulatory standards ^[2].

A September 2025 survey by the German Cooperative Banking Association revealed that 71% of Volksbanken and Raiffeisenbanken were considering crypto services, up from 54% the previous year, with approximately one-third planning to launch offerings within five months ^[2].

In a related development, DZ Bank announced this week it has joined Qivalis, an 11-bank European consortium developing a regulated euro-denominated stablecoin targeting launch in the second half of 2026 ^[2].