Cryptocurrencies are not approved in some countries. Governments have passed laws restricting their use, either through outright bans or through methods such as restrictive banking rules, over-taxation or over-regulation.
But there is also a downside to this coin. Some places have captured the full potential of cryptocurrencies. Favorable tax laws and a relaxed regulatory approach have allowed blockchain technology to flourish.
Here are the six most crypto-friendly countries in the world.
1 Malta
Malta is arguably the world leader in crypto regulation. Malta's parliament calls its territory "Blockchain Island" and President George Vella describes Bitcoin as "the inevitable future of money."
In July 2018, the government passed three new bills to develop the backbone of blockchain technology in the country. They covered ICOs, exchanges, and other businesses in the crypto industry, respectively. Indeed, Malta was the first country to establish such laws.
Combined with the country's already low corporate tax rates and no sales tax on cryptocurrency transactions, the new laws have made Malta an interesting place for blockchain projects. The world's largest cryptocurrency exchange Binance has moved its headquarters to the country's capital, Valletta.
2 Japan
Also, the most crypto-secure large global economy is Japan.
It is the world's largest cryptocurrency market, with a robust pro-crypto regulatory framework. Since April 2017, the country has recognized crypto as legal property under the Payment Services Law. Despite some allegations, the Japanese government does not recognize crypto as legal tender.
Japan also boasts progressive rules for crypto exchanges, with over 200 registered in the country. The rules have gotten a little stricter in the past 12 months, following the $500 million Coincheck hack.
3. Hong Kong
Japan may be the most crypto-friendly major economy, but it is not even the most crypto-friendly country in Asia. This title belongs to Hong Kong.
The current standards were adopted in November 2018 and immediately increased the credibility of the country as the center of bitcoins.
Here's how Gary Chung, chairman of the Hong Kong Securities Association, described the new rules:
“This will increase investor protection and therefore attract more residents to trade cryptocurrency assets in Hong Kong [...] This will help Hong Kong become one of the leading cryptocurrency trading centers in the world, because proper regulation is very important to attract major players.”
Hong Kong's growing relationship with China is of minor concern. Across the border, the Chinese government has made its territory one of the least bitcoin-friendly places in the world, creating a striking juxtaposition. Follow geopolitical events in the region to see how history unfolds.
4. Bermuda
Back in the Western Hemisphere, Bermuda is the most crypto-friendly place in America.
Bermuda is a well-established offshore destination for insurance and investment firms, so it's no wonder it's moving into cryptocurrencies. Prime Minister Edward David Burt told the New York Times in early 2018 that “we want to position Bermuda as an incubator for the [crypto] industry.” By August of that year, the government approved a new class of banking services. a license for small high-tech start-ups and an accelerated ICO approval process.
Binance quickly seized the advantage again. It is in the process of building a global compliance base in the country, and is also investing $ 10 million in blockchain training for Bermudians and another $ 5 million in Bermuda blockchain companies.
The Caribbean has shown a lot of interest in crypto potential lately. Both Barbados, Antigua, and Barbuda have developed crypto-secure policies. For example, there is now a digital Barbados dollar pegged to the US dollar, while Antigua and Barbuda are selling citizenship in exchange for Bitcoin.
5 Switzerland
Switzerland is the most Bitcoin-friendly country in continental Europe.
The tiny canton of Zug south of Zurich begins this journey. This area has been dubbed "Crypto Valley" due to its 14 percent corporate tax rate, high concentration of blockchain businesses (over 600!) And Swiss style of direct democracy. The area made history in July 2016 when it became the first in the world to accept Bitcoin as legal tender for local taxes.
Today, many world-famous blockchain companies have headquarters in Zug, including the Ethereum Foundation, ConsenSys, Shapeshift, Dfinity, Aragon, and Bancor.
Here's how Shapeshift's COO described the company's decision to move to 2014:
“We knew that cryptocurrency is a very new thing and different regulators may view it differently. We wanted to find an environment where we thought she would be friendly. We have identified Zug and Switzerland as a whole as a place open to this type of innovation in this space.”
6. Estonia
Switzerland holds the European crown, but Estonia is also moving in that direction. The country is ranked as offering one of the highest rates of economic freedom and this philosophy has been applied to cryptocurrencies.
The most interesting development is the e-residency initiative. Crypto owners can become digital citizens and set up businesses under Estonian laws, which are subject to zero corporate tax on unallocated assets.
Crypto-friendly countries worth mentioning
There are other countries that are following the example of the six discussed. A progressive approach to Bitcoin and cryptocurrencies has been seen in Singapore, Slovenia, Liechtenstein, Dubai, Gibraltar and Georgia.