According to Cointelegraph: A proposal from Alliance90/The Greens in Germany's Bundestag to end the one-year tax-free period for cryptocurrency holdings is sparking heated debate across the country's crypto sector. With current law, private investors who hold cryptocurrencies for at least one year can realize tax-free trading profits. The Greens, however, deem this unfair compared to other financial instruments that face a flat 25% capital gains tax, regardless of holding duration.

Sabine Grützmacher, a member of the Bundestag for the Greens, asserts that their goal is to "create comparable conditions for all capital investment classes, including crypto assets," assuming they are more akin to stocks or gold than actual currency.

Contrarily, Ulli Spankowski, Bison founder and Boerse Stuttgart Digital's Chief Digital Officer, and Frank Schäffler, Bundestag member for the Free Democratic Party (FDP), argue that ending the exception could harm Germany's investment climate. Spankowski further insists that the one-year holding period bolsters the investor base and makes Germany attractive to crypto investors.

Despite friction within the governing coalition, comprising of the Social Democratic Party (SPD), the Greens, and the FDP, Schäffler notes that abolishing the exemption without FDP or SPD support is highly unlikely.

If the proposal passes, it might impact German markets and the growing trend of cryptocurrency investments among German investors. Simplification of capital formation and reward for long-term investments are highlighted as crucial for investment culture in Germany.

These discussions underscore the ongoing challenge of regulating the rapidly evolving crypto landscape and the need for comprehensive, flexible regulations that support innovation while ensuring investor protection.