On 14 November 2025, Trade Republic introduced the so-called “Crypto Wallet”. Since then, cryptocurrencies can be transferred from Trade Republic to external wallet addresses and received from there.
Before the introduction of the wallet function, trading in cryptocurrencies at Trade Republic was possible exclusively within the platform. The investor merely held a contractual claim against Trade Republic for the acquisition and sale of cryptocurrencies.
For tax purposes, this structure was treated like a financial instrument. Gains were automatically classified by Trade Republic as investment income and were subject to withholding tax at a rate of 25%, regardless of the holding period.
With the introduction of the wallet function, cryptocurrencies can now be transferred via the blockchain. Custody nevertheless continues to exist under the custodial model via a regulated custodian. This is not a conversion into a classic self-custody wallet. Rather, wallet functions were enabled within the existing custody structure on the platform.
However, this technical extension alone leads to a changed tax classification: cryptocurrencies in this structure are treated as other economic assets within the meaning of Section 23 EStG and are therefore placed on an equal footing with acquisitions via classic crypto platforms. This means that if the sale takes place within one year of acquisition, the gain is taxable at the personal income tax rate. After the one-year period has expired, it is tax-free.
For purchases made before and after 14 November 2025, a different tax treatment may therefore apply — even though, from the investor’s subjective perspective, they simply “bought cryptocurrencies at Trade Republic”.
The transfer of cryptocurrencies from Trade Republic to one’s own hot or cold wallet may also raise tax questions. A taxable private disposal transaction within the meaning of Section 23 (1) EStG requires that one economic asset be exchanged for another economic asset or for consideration. This is the case, for example, when selling for fiat currency, exchanging into other cryptocurrencies or using the asset as a means of payment. Pure wallet transfers do not fall within this category.
At first glance, the transfer of crypto assets from Trade Republic may appear to be a tax-relevant exchange, because before the transfer the investor does not hold a crypto asset in their own wallet, but merely a contractual claim against Trade Republic.
However, the investor’s contractual claim was directed from the outset at the delivery of the respective cryptocurrencies. The transfer to the investor’s own wallet therefore does not involve exchanging one economic asset for another. It merely fulfils the existing claim and delivers the held economic asset to the investor. The fulfilment of the claim therefore does not constitute a taxable event. The holding period is not interrupted by the wallet transfer. It continues unchanged.
