Which Countries are Best Positioned for the Use of Cryptocurrencies and How It Would Impact Their Economies
Now, here is a topic that could spur a compelling discussion. As a matter of fact, the question of which countries are the sweet spots for crypto adoption and application is one that pervades the crypto community throughout the world.
So, which are the countries that will rise up and live to the expectations of early adopters?
Although Bitcoin celebrated its tenth birthday this year, many countries still refuse to acknowledge its existence and look for ways to dispute its use cases. Some nations battle the spread of cryptocurrencies through the implementation of tight regulations, thus attempting to restrict their utility. Others impose systems that explicitly ban their presence.
Ecuador, Bolivia, Russia, India, and Vietnam are among the ones putting up the fence in hopes to fight off Bitcoin and to protect the current system from alteration.
On the other hand, there are those who welcome the new age of cryptocurrencies with open arms. Stats provided by Statista, one of the largest online portals for statistics, collecting data from the market and opinion polling institutes, as well as data derived from national and global economic organizations, indicate that Turkey is high on top of that list. Respondents who participated in the survey stated that they either used or owned some type of cryptocurrency.
The poll shows that right behind Turkey, with just two percent less, are Brazil and Colombia.
As a matter of fact, five countries from Latin America managed to find themselves within the top ten – Brazil, Columbia, Argentina, Mexico, and Chile.
Evidently, when it comes to the Eurozone, Spain is the trailblazer, with its citizens being among the best-informed population on the subject of crypto.
However, one country has already applied a rather peculiar business model and is reaping the rewards thanks to mother nature. A few years back, Iceland decided to use inexpensive electricity rates in order to harvest Bitcoin, and thus entered the crypto mining industry. Bearing in mind that Iceland’s energy comes from hydroelectric dams and geothermal power plants, creating electricity without carbon emissions, it was a no brainer. Not to mention the fact that weather on the island is particularly auspicious when it comes to such a line of work.
There have been numerous allegations made against Bitcoin’s network and how its electricity usage is causing serious damage to our climate and is straying off the path. Katrina Kelly-Pitou, a clean energy technology researcher at the University of Pittsburgh, begs to differ. According to her study, if technology were to mature by more than 100 times its current market size, it would still equal to only two percent of all energy consumption.
Guess what else? Banking alone consumes an estimated 100 terawatts, that’s a little bit more than three times the energy Bitcoin mining consumes.
We cannot proceed without mentioning Malta. Did you know that last year their parliament passed several cryptocurrency and blockchain bills that provide investors with a clear description of the required legal framework that enables setting up a legitimate cryptocurrency business?
No wonder many crypto businesses seek to set up their offices in this country. Among them is Binance, who chose Malta as the new home for their enterprise. Malta is also a host to all sorts of blockchain events, with the aim of raising awareness and supporting the crypto industry.
I’m not saying it’s all milk and honey over there. Apparently, certain banks are hindering the process of opening and activating accounts. IMF also reports that Malta needs to take immediate action towards improving its anti-money laundering standards.
Nonetheless, many still consider that small, Mediterranean country to be a haven, some type of getaway when it comes to pursuing a crypto career.
Let’s linger in Europe and turn our gaze towards Switzerland for a moment.
Banks have a bright and positive outlook on the situation and are willing to adapt in order to expand their line of services. For instance, many of them are introducing a variety of investment solutions through partnerships with crypto startups. Others are looking to launch custody solutions, digital asset storage and so on. Conceivably, the most significant measures taken so far to lure crypto companies and startups into the land of banks, cheese and clocks, is introducing licenses that allow crypto and blockchain companies to receive up to $100 million of public funds.
I’m quite sure everybody has heard by now that Facebook is trying to assemble its Libra endeavors there.
Gibraltar is another micro country that is looking to hop on and ride the crypto wave.
Last year they launched the Gibraltar Blockchain Exchange, with crypto trading available to the public.
The government realized that education plays a big role in the further development and adoption of crypto, so they set up blockchain courses at local universities, in collaboration with tech companies. All of these things prove that there is a stimulus to move in step with technological and business trends revolving around crypto and blockchain.
Singapore is the land of modernization and high tech. The city-state has been a symbol of leadership in regards to technological advancement for many years and fintech is the niche they’ve been concentrating on lately.
Although the Monetary Authority of Singapore has taken a progressive, prudent approach to the entire issue, keep in mind that tax-wise, Bitcoin is not considered a currency or commodity in the country
According to 99 Bitcoins, it falls under goods, thus a 7% (Goods and Services Tax) is applied to all Bitcoin-related transactions. Did you know that Singapore ranks as one of the most favorable countries for ICOs last year?
On to the other side of the world lies Bermuda, a small Caribbean island with a population of around 65,000. Nevertheless, it is a renowned tax haven. It has no VAT, no corporate, income, wealth or capital gains taxes.
Bermuda has only a minimal payroll tax, which is around 10%, as well as high taxes on goods and services. On top of that Bermuda does not have legislation that specifically governs cryptocurrencies. Therefore, Bermuda’s light taxation policies extend to cryptocurrencies in general.
Enter the land of the rising sun – Japan. Maybe it’s not a coincidence that the inventor of BTC carries a Japanese pseudonym.
Japan was arguably the first country in the world to approve Bitcoin as legal tender. The first major exchange, Mt.Gox, was established in Tokyo. The country has also been praised as a leader in crypto trading volumes, as most of their exchanges offer zero-fee trading.
The National Tax Agency released guidance on the tax treatment of crypto profits and essentially it stipulates that anyone reaching and exceeding 200K margin, will be eligible for taxation.
Another prosperous country worth mentioning is Cyprus. It has become a European financial center due to an advantageous geographical location and beneficial tax system with no double taxation. Cyprus is certainly no laggard when it comes to embracing crypto. Andreas Antonopoulos, a widely known Bitcoin advocate, is also a professor at the University of Cyprus, where he teaches fundamentals on crypto – a kind of a Crypto 101.
And last but not least, we have a newcomer who is leaving quite an impression on the crypto stage – Portugal.
Someone once said: “Just as a tax law can imprison you in one country, the very same tax law can free you in another country.” Keep this in mind and remember that as of August, Portugal is considered a perfect getaway for all those involved in crypto ventures.
Both cryptocurrency trading and payments in crypto are going to be exempt from the taxation system in the country.
Circumstantially, merits should be credited to a person called David Hedqvist, a Sweedish programmer and moderator of Bitcoin.se portal. Where’s the connection you might wonder?
You see four years ago Mr. David took a firm stand and decided to take matters into his own hands and challenge the regulatory system in the European Court of Justice, so he could liberate Bitcoin from VAT.
With all this in mind, you can imagine why many people flock to these countries to start up their own crypto dream enterprise.
With the introduction of crypto, countries that have embraced it have now begun to feel the positive impacts on their economies. Although crawling through a minefield of censorship and regulation, cryptos are slowly but surely crushing the barriers and paving the way to a new monetary and economic paradigm.
In conclusion, approaches to adopting crypto and its use cases differ from country to country. In general, cryptocurrencies remain in a grey zone on much of the planet. While some are wary, others rush to grab the higher ground on time.
Many have now entered the race and we are still at its early stage. Countries and players are taking lead roles from one another, but we are far from having a clear winner. Actually, the whole point is that everyone wins. It doesn’t really matter who will open the door that leads to an entirely new era in economic and social relations. What’s more important is that we are collectively on board, working closely with each other, bringing new innovations to fruition. What we need at this point, in order to finally revolutionize different industries, is global adoption and fair, transparent and trustful playing ground.
If you wish to learn more about the regulation of cryptocurrencies around the globe, this link will provide you with accurate insight. >>>
Disclaimer: The information provided in this post is not legal, accounting, or financial advice. I am not a lawyer, accountant, or financial advisor. I am not registered as an investment adviser with any federal or state regulatory agency. The Information should not be construed as investment or trading advice and is not meant to be a solicitation or recommendation to buy, sell, or hold any cryptocurrencies.
Title photo provided by Statista.