- Germany’s center-right CDU/CSU secured the most seats, potentially shaping the country’s stance on crypto.
- DekaBank launched crypto trading for institutions, while retail access remains uncertain.
Germany’s recent elections saw 28.52% of the vote for the centre-right CDU/CSU, which has become the leading party. The right-wing party AfD won 20.8%. No party holds a Bundestag majority, and coalition talks have started.
Political instability has raised questions about digital innovation, including crypto. Mark Foster, who sits on the Crypto Council for Innovation, expects stability in digital asset policies in the country.
There are no radical changes, but there may be a heightened debate on crypto’s role in Germany’s economy under the new leadership. The European Commission’s focus on competitiveness is consistent with such an approach.
Germany remains a leading figure in Europe’s crypto regulations. Despite the slow implementation of the EU’s Markets in Crypto Assets (MiCA) regime, Germany has effectively processed licenses. The election result is not expected to derail existing regulations.
CDU/CSU Wins, but Economic Challenges Persist
Despite CDU/CSU’s victory, fiscal woes remain. The economy is under pressure, weighed by falling exports and disagreements on immigration strategies.
Investors are also focusing on Germany’s fiscal approach, such as the “debt brake.” The debt brake limits government borrowing and has become the subject of political debate.
Deutsche Bank economists have observed that while the outcome reduces uncertainty, it also signals an anti-establishment movement. The total vote for both major parties is at an all-time low, reflecting increased political fragmentation. Any fiscal policy changes, such as debt brake amendments, will have to have broad political support.
Germany’s role in EU affairs is also under scrutiny. The war in Ukraine and trade tensions against America under Donald Trump’s potential re-election provide external pressures. How the new administration manages these will influence market confidence and economic recovery.
Institutional Crypto Expansion in Germany
Amid a political shift, Germany’s banking sector is spearheading the adoption of digital assets. Germany’s top bank, DekaBank, is launching crypto trading, custody, and asset management services for institutional clients.
The move follows the green light from Germany’s financial regulator, BaFin, and the European Central Bank. Retail investors, however, are not included in DekaBank’s plans.
The Sparkassen association, to which DekaBank belongs, is evaluating its retail crypto services strategy. Instead, cooperative banks, led by DZ Bank, intend to offer crypto services to their retail customers by summer.
DekaBank sees crypto strategically, and portfolio diversification is their priority. According to them, institutional clients can bear crypto risks. Other banks are also approaching the institutional market, and for their corporate clients, LBBW, in collaboration with Bitpanda, offers crypto custody and trading.