Germany’s federal election on 23 February 2025 is set to be a turning point, not just politically but also for the country’s financial and crypto landscape.
With rising political instability and growing debates around digital assets, the election’s outcome could determine whether Germany tightens regulations on Bitcoin and crypto trading or moves towards a more open, decentralised financial system.
The election follows the collapse of Chancellor Olaf Scholz’s coalition, which has created uncertainty in policymaking.
As Germany prepares to vote, key parties are divided on their approach to crypto, with some pushing for deregulation while others seek stricter oversight.
Political instability and crypto
Germany’s crypto sector is at a crossroads, with major financial institutions, including Deutsche Bank and DZ Bank, already integrating blockchain-based services.
However, strict regulations under the German Banking Act and the Federal Financial Supervisory Authority (BaFin) continue to pose challenges for investors and businesses dealing with digital assets.
The upcoming election will see 630 parliamentary seats contested, with 316 required for a majority.
The ruling Social Democrats (SPD), Greens, and Free Democrats (FDP) have historically leaned towards stronger financial regulations, while the opposition, including the Alternative for Germany (AfD), has pushed for a more market-friendly approach.
This divide will be crucial in shaping Germany’s stance on Bitcoin, stablecoins, and central bank digital currencies (CBDCs) post-election.
AfD backs deregulation
The right-wing Alternative for Germany (AfD) party is emerging as a key player, ranking second in polls, according to the Polymarket prediction platform.
AfD’s policies on crypto stand in stark contrast to other major parties, as they advocate for minimal government intervention in digital asset markets.
If AfD gains significant influence in the new government, Germany could see relaxed restrictions on Bitcoin trading and decentralised finance (DeFi) applications.
The party has also opposed the European Central Bank’s (ECB) digital euro project, arguing that cash should remain the dominant form of payment.
This could set up Germany for a conflict with EU regulators, who are actively promoting digital finance reforms.
AfD’s crypto-friendly stance aligns with trends seen in countries like the US, where Republican lawmakers have increasingly pushed for financial deregulation.
If AfD secures power, Germany could become one of the most crypto-progressive nations in the EU, potentially drawing more blockchain investments to the country.
Greens push for oversight
While AfD supports deregulation, the Greens have taken the opposite approach.
The party has proposed a national enforcement body to tackle crypto-related financial crimes, including tax evasion, money laundering, and fraud.
This move is in response to growing concerns over illicit financial activities tied to digital assets.
The Greens’ plan includes strengthening collaboration with EU authorities to monitor crypto exchanges and enforce anti-money laundering (AML) laws.
With Germany already implementing the EU’s Markets in Crypto-Assets (MiCA) regulations, a stronger push for oversight could make it harder for anonymous transactions and decentralised exchanges (DEXs) to operate freely.
The election’s outcome will determine whether Germany takes a more crypto-friendly approach like AfD’s vision or moves towards increased oversight and regulatory enforcement.
With Deutsche Bank and other major financial institutions entering the crypto space, Germany’s future policies will directly impact institutional adoption and retail investment in digital assets.
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