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10 Most Cryptocurrency-Friendly Countries for Investors and Traders

21 Sep 2022 By : Harshil Shah
Southeast Asia’s Lar

Key Takeaways

  • Governments are busy drafting regulatory frameworks for cryptos as per their understanding of the technology and its future

  • Portugal, El Salvador, and, Switzerland are some of the most crypto-friendly countries in the world

  • Transparent regulatory frameworks, low tax bars, and supportive governments make the foundations of crypto-friendly countries

  • The government of India finds the popularity of crypto alarming and does not want a free flow of money in an unregulated asset class

Cryptocurrencies are making their position stronger in the global financial order. The increasing adoption and their universal use cases make them a perfect choice to become a currency of Web 3.0. Government around the world understand the potential of cryptocurrencies and does not want it to affect their traditional revenue models. For these reasons, governments are busy drafting regulatory frameworks for cryptos as per their understanding of the technology and its future. 

But there are some countries in the world that are not only welcoming but also involved in the process of crypto expansion. Today we are going to explore a list of 10 countries that share our enthusiasm for crypto and have a transparent regulatory mechanism around it.

The scale of Crypto Adoption

Cryptocurrencies are reaching new places with every passing day and are expected to become the future of OTC (Over-the-Counter) microtransactions. As new stakeholders are entering the market, an informed environment for the crypto trade is being framed. The world is moving towards democratization and decentralization of monetary institutions and once that is achieved, there is no going back. 

Governments worldwide understand this and want to leash the rise of this technology. Regulating the transactions has become a mandate but finding the right balance between regulation and liberty is a hard nut to crack.

10 Most Crypto-Friendly Countries

In this section, we are going to share a list of the 10 most crypto-friendly countries in the world. We will try to understand their policies, reasons, and interests in adopting crypto earlier than others. 

Portugal

The crippled state of the Portuguese currency system and the effects of hyperinflation in the past has made Portugal an ideal place for crypto adoption. Portugal is considered one of the most crypto-friendly countries in the world due to its flexibility in crypto laws. The Portuguese government has explicitly shown its support for the technology by integrating blockchain in its digital identification register. 

Its history of economic instability awaited an alternative solution and cryptocurrencies offered crypto with the same. 

El Salvador

El Salvador was the first country in the world to officially declare Bitcoin as a legal tender within the state. The gravity of this decision has put El Salvador at the forefront of crypto adoption and made it a haven for crypto enthusiasts from around the world. El Salvador promotes cryptocurrencies as a path to financial freedom and achieving true decentralization. 

Even though the blunt declaration of Bitcoin as a legal tender has its complexions, El Salvador is holding strong to its stance in this long crypto winter. 

Malta

When the world’s biggest crypto exchange permanently shifted to an Island nation in the Mediterranean Sea, it shifted the focus of the crypto community to Malta. Malta’s government is known for having transparent crypto policies and an intent to regulate them in the future. 

Malta has assured blockchain business owners of open crypto trading policies without the fear of sudden penalization from the government. The lack of taxes in the operation or trading of cryptocurrencies is making Malta a hub for new crypto businesses. 

Switzerland

Located in the heart of Europe, Switzerland has much more to offer to crypto enthusiasts than a relaxing vacation. Singapore offers free electricity to all Bitcoin miners within the country to encourage Bitcoin’s operation and promote mining within the state.

The Swiss government has also excluded crypto profits from any taxes attracting crypto traders and blockchain businesses from around the world. Switzerland has a different stance on cryptos and does not see them as a threat to its existing economy. 

Singapore

Taking cryptocurrency adoption as a chance for inviting innovation, Singapore is bullish on the future of crypto. Singapore not only legalizes the trade and custody of decentralized currency but also promotes new blockchain businesses with its easy-to-follow regulations.

No taxation on crypto profits along with the inclusion of ICO/IDOs and exchanges in their financial regulation legitimize their stance further. Singapore does not put any restrictions on crypto mining and has promised to not make a license mandatory for the same. 

Bermuda

With another island’s entry into the list, Bermuda was one of the first countries in the world to draft a regulation around cryptocurrencies. Bermuda has a working regulatory framework around the usage, custody, exchange, ICO/IDOs, and other crypto-related activities. 

The Bermuda government is also willing to experiment with the blockchain. In a recent project, Bermuda was planning to introduce a blockchain ledger for the land registry in the country. Clear crypto laws and a welcoming government stance make Bermuda a center of attention for the crypto community. 

Germany

Known as the crypto capital of Europe, Germany is home to the finest crypto innovation in the world. With over 2 million active crypto users in the country, Germany is a leading center of mass crypto adoption. Germany also has the highest number of Bitcoin nodes concentration among all the nations with sufficient regulation around the same. 

Germany also exempts long-term crypto holdings from any VAT and defines clear regulations around crypto taxation. The open-minded approach of the government has made Germany a top-shot in crypto-friendly rankings leaving behind the USA and Singapore in the list. 

UAE

Leading the middle east towards regulated crypto adoption, the UAE authorities are doing a great job in making laws easier for crypto businesses. With time Dubai has become the center of crypto discussions and forums. Posing itself as the regional crypto hub, the UAE government has shown interest in introducing blockchain technology in administration operations.

Many crypto exchanges are establishing themselves in Dubai to avoid insane taxes and shady regulations from other governments. Abu Dhabi Global Market and the Dubai International Financial Center are interested in collaborating with digital finance for a better future. 

Luxembourg

Luxembourg is another European country with well-drafted crypto regulatory laws. Known as the richest country in the world, Luxembourg is famous for its pro-business regulations and low tax rates. It does not restrict any crypto trading or mining activities and encourages new-age crypto innovation.

Luxembourg does not tax cryptocurrency profit gains making it a perfect place for crypto traders to trade in Europe. 

Czech Republic

Last but not least, the Czech Republic is a country that started with crypto regulations way back in 2015. Known for its flourishing crypto ecosystem, the Czech Republic has been the home of many crypto startups. From Bitcoin ATMs to free crypto exchanges, the Czech Republic has everything that a crypto enthusiast wishes to have. 

Crypto taxes in the Czech Republic are also minimal, creating an ideal environment for a prospering crypto trading culture.

Where Does India Stand?

Indian government’s relations with cryptocurrencies have been a combination of ups and downs. Cryptocurrencies are unregulated but legal in India as a large number of investors are still active in the industry. Being a hub of IT innovation, the Indian startup ecosystem has embraced the technology and successfully experimented with its various use cases.

Regulating cryptocurrencies in India comes with its own set of challenges and makes it a herculean task for the government. The government of India also finds the rising popularity of cryptocurrencies alarming and does not want a free flow of money in an unregulated asset class. 

The recent Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 has put a 30% tax on crypto profits. These tariffs on the crypto trade are acting as a shadow ban for Indian traders and restricting the flow effectively. However, investing in cryptocurrencies is hundred percent legal in India with 1% of TDS on each trade

Cryptocurrencies are the inevitable future of finance. The world is embracing this technology and we are yet to witness the pinnacle of crypto in the upcoming days.


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