Germany moved up three places on an annual basis and took the top spot as the most crypto-friendly country in the world, according to Coincub’s most recent quarterly report.
However, the country is not open to decentralized finance (DeFi). Coincub measures the country’s acceptance of the nascent DeFi sector at five out of 10.
Every Country’s crypto adoption point is assessed separately from the Quarterly Global Crypto Ranking report. All countries, including Germany, are scored out of 10 under eight different categories which make up the country’s crypto rating.
Germany recorded eight out of 10, or higher, in all categories except the DeFi acceptance category. The details of the scoring state:
“Much legislation has been passed to ensure licensing and compliance by crypto-related service providers, but as yet it is not clear how DeFi can be accommodated by the existing financial framework.”
Germany and crypto
According to Gemini’s 2022 Global State of Crypto report, 53% of Germans admit to being “crypto curious,” while 43% of high-income Germans own crypto assets. Additionally, roughly 17% of all Germans own cryptocurrency. Germany’s 46% female crypto adoption rate is also one of the highest in the world.
Germany’s central bank is also open to crypto-assets and CBDCs; however, it is reluctant to deploy anything before sound regulations.
In March 2021, the president of Germany’s central bank, Jens Weidmann, stated:
“CBDC would become a very close substitute for bank deposits and in times of stress, the attractiveness of CBDCs versus a bank deposit will even increase.”
He added that before implementing any eurozone CBDC, the “legal bases will be sound.”
Currently, cryptocurrencies are not considered legal tender in Germany. All crypto businesses must acquire authorization from Germany’s Federal Financial Supervisory Authority (BaFin).
In June 2021, BaFin issued the first crypto custody business license for Coinbase. The regulator said due to lack of precedent it would be forming an interdisciplinary, cross-departmental team to handle all crypto-related issues.
Other highlights from the report
The Coincub quarterly report uses a scoring algorithm to rank indicators such as fraud events, availability of digital asset courses from universities, and the number of ICOs. For the first quarter of 2022, The U.S. and Singapore follow Germany as the second and third most crypto-friendly countries, respectively.
The report said that Singapore, which was formerly ranked first, dropped to second place due to recent government decisions to restrict crypto services.
The U.S., on the other hand, takes third place but ranks first in the world in domestic mining. Australia and Switzerland follow the top three countries as fourth and fifth, respectively.