German federal financial officials have ruled that Bitcoin is considered a real currency in the country and can be legally used.
As the German Finance Ministry has officially recognised Bitcoin as a currency, the digital money has become a legal unit of account, both in legal and taxation terms. The acceptance of Bitcoin is promoted by Bundestag Finance Committee member Frank Schaeffler, among others; Schaeffler considers it a part of the free market competition, which governments should not interfere with.
“Sooner or later, depending on the success of private currencies, authorities will feel the urge to ban or regulate private currency. A free country should resist and not intervene in citizen’s private choice of money. In my opinion the production of money is none of the government’s business,” the politician stated.
The Bitcoin exchange rates have changed in the past months as seen below:
Earnings from selling bitcoins a year after purchase are tax-free in Germany; that is, if someone sells their bitcoins after over a year from their acquisition or purchase, it is legally considered a private sale transfer. For example, if a person had purchased 100 bitcoins on 22 August, 2012 for $1,000 and sold it this April for their worth of over $26,000, they would have had to pay a $6.500 tax on the transaction. In case, however, they had waited until today, they would no longer have had to pay it.
It is still unclear how bitcoin trade will be taxed in Germany. Incomes from the digital currency are taxable, according to the report of the Finance Ministry, but experts expect private persons to be able to trade tax-free and that only businesses, traders and trading platforms would have to pay.
Bitcoin has for long been one of the hot topics of the online gaming market. In June, operators and regulator alike expressed their vision of true potential in the digital currency at the iGaming Super Show in Amsterdam. In March, the iPoker network introduced Bitcoin as a supported means of deposits and withdrawals.
Some experts say it is only a matter of time before the virtual currency replaces the current financial system entirely, while other fear that money laundering and illegal transactions become all the easier with the anonymous unit.