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The Most Bitcoin-Friendly Places in the World

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Image Credit: olgysha/DepositPhotos

In some countries, crypto is frowned upon. Governments have passed laws to restrict their use, either via an outright ban, or through techniques such as restrictive banking rules, excessive taxation, or over-regulation.

But there’s a flipside to that coin. Some places have embraced everything about crypto’s potential. Favorable tax laws and a relaxed approach to regulation have allowed crypto businesses to flourish.

Here are six of the most crypto-friendly countries in the world.

1. Malta

Malta is possibly the global leader in crypto regulation. The Maltese parliament refers to its territory as “Blockchain Island”, while the President, George Vella, describes Bitcoin as “the inevitable future of money.”

In July 2018, the government passed three new bills to layout a framework for 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 lack of sales tax on fiat crypto transactions, the new laws turned Malta into an instant attraction. Within months, the world’s largest crypto exchange—Binance—had relocated its headquarters to the country’s capital, Valletta.

2. Japan

A couple of other microstates can rival Malta for the crown of the most Bitcoin-friendly country. At the other end of the scale, however, the most crypto-friendly major world economy is Japan.

It is the world largest Bitcoin market and has robust pro-crypto legislation in place. Since April 2017, the country has recognized crypto as legal property under the Payment Services Act. Though contrary to some claims, the Japanese government does not recognize crypto as legal tender.

Japan also boasts progressive regulations for crypto exchanges—more than 200 exchanges are registered in the country. Rules have become slightly stricter in the last 12 months following the $500 million Coincheck hack.

3. Hong Kong

Japan might be the most crypto-friendly large economy, but it’s not even the most crypto-friendly country in Asia. That title belongs to Hong Kong.

According to legal experts, the country’s crypto laws are clear and easy to follow. The current standards were adopted in November 2018 and immediately enhanced the country’s credentials as a Bitcoin hub.

Here’s how Gary Cheung, the Chairman of Hong Kong Securities Association, described the new regulations at the time:

“It will boost investor protection and hence attract more mainlanders to trade cryptocurrency assets in Hong Kong […] This will help Hong Kong to be among the top cryptocurrency trading centers worldwide because proper regulation is very important for attracting the big players.”

Of slight concern is Hong Kong’s increasingly rocky relationship with China. Across the border, the Chinese government has made its territory one of the least Bitcoin-friendly locations in the world, creating a striking juxtaposition. Keep your eye on the geopolitical developments in the region to see how the story evolves.

4. Bermuda

Back over in the Western Hemisphere, the most crypto-friendly place in the Americas is Bermuda.

Bermuda is a well-established offshore destination for insurance and investment companies, so it’s no surprise to see it moving into crypto. The country’s Premier, Edward David Burt, told the New York Times in early 2018 that “we want to position Bermuda as the incubator for [the crypto] industry.” By August of the same year, the government had approved a new class of banking license for small fin-tech startups and a fast track process for ICO approvals.

Binance was once again quick to take advantage. It’s in the process of creating a global compliance base in the country, as well as an investment of $10 million in educating Bermudians about blockchains and a further $5 million on Bermudian blockchain companies.

Other Caribbean islands have also been showing keen interest crypto’s potential in recent times. Both Barbados and Antigua and Barbuda have developed crypto-friendly policies. For example, there’s now a digital Barbadian dollar that’s pegged to the US dollar, while Antigua and Barbuda has been selling citizenship in exchange for Bitcoin.

5. Switzerland

Switzerland is the most Bitcoin-friendly country in mainland Europe.

The tiny Canton of Zug to the south of Zurich is leading the way. The area has been dubbed “Crypto Valley” in light of its 14 percent corporate tax rate, high concentration of blockchain businesses (more than 600!) and Swiss style of direct democracy. In July 2016, the district made history when it became the first place in the world to start accepting Bitcoin as a legal tender for paying local taxes.

Today, many globally renowned blockchain companies are headquartered in Zug, including Ethereum Foundation, ConsenSys, Shapeshift, Dfinity, Aragon, and Bancor.

This is how Shapeshift’s COO described the company’s decision to relocate in 2014:

“We knew that crypto was a very new thing and various regulators might view it in different ways. We wanted to find an environment where we thought it would generally be friendly. We identified Zug, and Switzerland in general, as a place that was open to this type of innovation in this space.”

6. Estonia

Switzerland holds the European crown, but Estonia is an exciting place to watch. The country is frequently ranked as offering one of the highest rates of economic freedom, and that philosophy has been applied to crypto.

The most exciting development is the e-residency initiative. Crypto entrepreneurs can become digital citizens and set up businesses under Estonia’s laws which are liable for zero corporation tax on undistributed assets.

Crypto-Friendly Countries: An Honorable Mention

Some other countries are following the lead of the six we’ve discussed. Other places with progressive approaches to Bitcoin and crypto include Singapore, Slovenia, Liechtenstein, Dubai, Gibraltar, and Georgia.

If you’d like to learn more about the legality of Bitcoin, check out our other articles on illegal uses for Bitcoin that are still valid today and explaination of how legal issues are one of crypto’s primary challenges to overcome.

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Dan Price
Dan has a background in both finance and technology. Previously, he worked for more than five years as a private financial consultant, advising clients on single investments, fund portfolios, long-term savings, and more. Dan holds professional qualifications from the UK's Chartered Insurance Institute, including a Certificate in Discretionary Investment Management and a Diploma in Financial Planning. Dan also writes for Blocks Decoded's sister publication, MakeUseOf. He started at the company in 2014 and has gone on to hold several key positions in the organization. In mid-2017, Dan finally started to invest in crypto. He is a firm advocate of index tracking funds and automated portfolio balancing. He's currently using the Crypto20 token and Hodlbot for exposure to the top 50 coins.
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