Crypto-asset regulatory landscape: a comparative analysis of the crypto-asset regulation in the UK and Germany

Abstract

The purpose of this research paper is to compare and analyse how crypto-assets are regulated in the UK and Germany. The aim is to understand and highlight the approaches taken by these two countries in terms of regulating crypto-assets and to explore the potential impact that their regulatory frameworks could have on the market for these crypto-assets. The research employs a doctrinal research design to examine the crypto-asset regulatory regimes in the UK and Germany. A comprehensive review of existing literature, official regulatory documents and relevant legal frameworks is conducted to understand the core components of each country's crypto-asset regulations. The findings of this study reveal divergences in the regulatory approaches of the UK and Germany towards crypto-assets. While the UK has embraced a principles-based regulatory framework, fostering innovation and industry growth, Germany has adopted a more prescriptive and cautious approach, focusing on investor protection and market stability. The research identifies that the UK's flexible approach has attracted a flourishing crypto-asset ecosystem, while Germany's conservative stance has offered greater investor confidence. However, certain regulatory gaps and challenges persist in both jurisdictions, such as ambiguities in classification and tax treatment, requiring further attention.