Cryptocurrencies have changed the way people send and receive payments, as they offer plenty of advantages, like instant payments, lowered transaction costs, reduced risks and better accessibility. When it comes to digital currencies, everything started with Bitcoin, the first cryptocurrency that was released in 2009. Bitcoin was the only alternative in the market for a long time, but that is not the case anymore, as plenty of other digital coins have entered the stage. Ethereum is one of them, bringing several innovations that improve customers’ experience even more. However, some people still wonder how to buy Ethereum or fear investing in cryptocurrencies because of their volatility.
Cryptocurrencies are a hot topic at the moment, and this is why many countries have gone above and beyond in taking steps to nurture a crypto-friendly climate, legalize payments and provide people with lessons on how to buy crypto. So, let’s find out the best countries for avid crypto investors and traders.
How can you tell if a country is crypto-friendly?
A crypto-friendly country succeeds in creating a legal framework where digital payments are allowed so that this market can thrive. At the moment, some countries have tried to accommodate the demands of the evolving world that wants decentralized finance, but only a few have been recognized worldwide as crypto frontrunners. These countries support using virtual coins, encouraging various payment methods and updating legal definitions to apply equality to cryptocurrencies and fiat money.
For example, some countries that allow Bitcoin payment offer people several benefits, like eliminating or minimizing the tax when staking, trading, selling or buying crypto. With the help of these policies, plenty of countries are recognized worldwide as being crypto-friendly.
What are the most crypto-friendly countries?
Singapore
Singapore is one of the crypto-friendly countries, achieving its reputation with a good reason. Singapore has a highly developed economy and policies to help entrepreneurs, small businesses, and multinational corporations flourish. This is why the nation has encouraged a system of laws that support an equally thriving crypto space. By implementing these measures, this country has attracted plenty of organizations and investors, making it attractive for traders, investors and companies.
Singapore is recognized as one of the biggest global fintech hotspots for crypto enthusiasts because it offers plenty of opportunities for crypto ventures. For instance, the country doesn’t require people to fulfill tax obligations if they trade profits. Also, crypto transactions are often perceived as barter trade so that the people holding the payment tokens can be excluded from the scope of taxation.
Switzerland
Switzerland is one of the first shining stars that appeared in the world of digital currencies. Swiss banks were the first to allow crypto organizations in 2018 to open business accounts, encouraging legitimate uses of digital coins and reducing fraud. Switzerland classifies cryptocurrencies as assets, and in some areas, Bitcoin is considered a legal tender.
Each region of Switzerland has its own legal definitions and regulations, but most are crypto-friendly. For example, Zug is known as the “Crypto Valley,” thanks to the numerous enterprises, start-ups, and shops that allow crypto payments. The Swiss banks create a safe space for crypto businesses and investors by minimizing risk and maximizing privacy. The country’s dedication and openness towards cryptocurrencies have made Switzerland one of the most crypto-friendly countries in the world.
The Netherlands
The Netherlands follows the standard regulation of the International Financial Action Task Force (FATF), and because of that, it doesn’t add burdensome regulations against digital currencies. Cryptocurrencies are currently regulated by the Dutch National Bank, where authorities have a lenient attitude towards virtual coins, thinking they have a huge potential to boost the country’s economy. In this fact stands the confidence of the population to use digital currencies.
The government is also supporting blockchain projects and is interested in seeing if this technology can be made more sustainable. The approach makes the Netherlands one of the most crypto-friendly countries with a positive attitude towards cryptocurrencies.
El Salvador
El Salvador is an important country regarding digital assets, being one of the first nations to adopt Bitcoin as a legal tender. The government was actively involved in the market, where President Nayib Bukele proposed bonds backed by cryptocurrencies. El Salvador made some headlines when it considered Bitcoin a legal tender alongside its national currency, the U.S. dollar, and inspired plenty of governments around the world. The country is also crypto tax-free and doesn’t tax profit or income from crypto-related trades or investments.
Germany
Germany is an important country supporting the development of cryptocurrencies, encouraging trade and investments by being tax-free if the digital currencies are held for at least one year. Still, if the funds are exchanged before a year, there will be a tax if the profit is less than €600.
The regulations in Germany made it a crypto-friendly country, where more than a third of the population invests in digital coins.
Malta
Although it is a small country, when it comes to cryptocurrencies, Malta is a major player. Malta is home to crypto exchanges, like Binance and several blockchain projects, offering a friendly regulatory environment and a strategic location.
Since 2018, Malta has positioned itself as one of the most crypto-friendly nations by creating a “digital island” and attracting many crypto businesses. Their strategy has worked, as Malta has brought numerous crypto investors and companies to their shores, encouraging healthy expansion and discouraging fraud. Also, Malta is one of the best countries regarding crypto taxes, offering plenty of benefits for foreign entities, residents and crypto companies involved in decentralized finance.
The bottom line
Cryptocurrencies have become very popular in the last few years, and numerous people are looking for businesses where they can pay with digital assets. This is why countries have looked for ways to support this evolution, but legality alone is not the only measure that needs to be taken. Around the world, some countries are recognized for their initiates, having generous tax laws and a good environment encouraging adoption and promoting innovation.
