Why License With BaFin
BaFin has supervised crypto activity longer than most EU regulators, and its approval signals credibility to banks, counterparties, and institutional clients. For firms that want to be taken seriously across Europe — and especially those targeting the DACH market and institutional money — a German CASP authorization is a strong base from which to passport EU-wide.
The trade-off is rigour: BaFin sets a high bar on governance, capital, and documentation, and the process is demanding. That same rigour is what makes the license valuable.
From the KWG Crypto-Custody License to MiCA
Before MiCA, Germany regulated crypto custody under the Banking Act (KWG), with a dedicated crypto-custody license introduced in 2020. MiCA replaced this national regime with the harmonised CASP authorization. Firms that held the KWG crypto-custody license transitioned into the MiCA framework during the grandfathering period, which has now closed.
The practical effect in 2026: new and existing German crypto businesses operate under MiCA, supervised by BaFin, with the benefit of EU passporting that the old national license never offered.
BaFin CASP Requirements
A BaFin CASP authorization requires the standard MiCA package, applied with German thoroughness:
- A German legal entity — typically a GmbH or AG;
- Minimum capital by service class — €50k / €125k / €150k (see capital guide);
- Fit-and-proper management with relevant experience, often expected to be locally credible;
- A complete application file — programme of operations, governance, AML, ICT;
- A strong AML/CFT programme and DORA resilience framework.
Process & Timeline
The procedure follows MiCA's clock — a 25-working-day completeness check and a 40-working-day assessment — but in practice BaFin engagements run to roughly 4–6 months end to end, depending on the quality of the file and the complexity of the business. BaFin tends to ask detailed follow-up questions, so a complete, well-evidenced first submission materially shortens the timeline.
Costs
Indicative costs for a BaFin CASP authorization:
- Government/supervisory fees: roughly €10,000–€25,000;
- Minimum capital: €50,000–€150,000 depending on class;
- Professional fees: typically €15,000–€45,000 for advisory, drafting, and submission.
Germany is not the cheapest EU route — if cost is the priority, see our cheapest crypto license guide — but it offers credibility that lower-cost jurisdictions cannot match.
Is a BaFin License Right for You?
Choose Germany if you value regulatory prestige, are targeting the DACH or institutional market, or need the strongest possible standing with banking partners. Choose a lighter-cost jurisdiction if speed and budget dominate and your model does not depend on a marquee regulator. Either way the license passports across the EU, so the decision is about credibility and cost, not market access. We help firms make this call and execute it via our Germany CASP service.
