Cryptocurrency has built a new economy. It enables people to send and receive money regardless of their geographical location. People have got a new financial instrument to invest and gain passive income. Looking at the rapid growth of the cryptocurrency market in the year 2019, many countries have started to take notice of Bitcoin and other digital currencies.
Until 2019, the majority of countries had put some legal regulations on cryptos. However, by seeing the exceptional growth last year, some countries have become lenient towards it and made cryptos legal. These countries got attracted by the advantage of crypto like- you can use this as a mode of payment and borderless transactions, low transaction fees, etc.
In this guide, you will know which countries have taken a friendly step towards cryptocurrencies. If you are looking for a new country to start a digital currency business, you should have a look at the countries listed in this article.
We have compiled a list of countries that favour cryptocurrency in 2020:
Malta Government created a new Malta Digital Innovation Authority in February 2018. This authority was introduced to provide an exclusive regulatory framework for cryptocurrency business. The Malta Digital Innovation Authority certifies the blockchain platforms used by companies and also improves the verification processes for crypto traders.
Prime minister of Malta has said that their aim is to become a global pioneer in the regulation of blockchain-based businesses and a field of world-class fintech companies. Binance has earlier announced that it will relocate its headquarter to Malta. Also, an Indian crypto exchange has partnered with OKEx, a Malta-based trading platform, to offer futures trading product.
The Light Taxation policies of Bermuda has extended to Bitcoin and other digital currencies as well. Bermuda Monetary Authority (BMA), Bermuda’s financial regulator published a proposal paper regarding the regulation of Virtual Currencies known as Virtual Currency Business Act (VCBA). To join with Bermuda is Binance, the largest cryptocurrency platform.
Bermuda also aims to achieve AML (Anti-Money Laundering) to provide a user-friendly environment for cryptocurrency businesses. In January, a cryptocurrency exchange and custodian named Gemini Trust Company launched a captive insurance company licensed by BMA. Also, Bermuda is planning to build a comprehensive cryptocurrency ecosystem and believes that it will become a financial powerhouse of its own.
Zug, a town of Switzerland has been nicknamed the ‘Crypto Valley’. The reason behind this are some progressive laws being passed regarding cryptocurrency and its business. Here, BTCs are accepted as a mode of payment for utility bills.
According to regulatory guidelines passed by the Swiss Financial Market Supervisory Authority, ICOs will be considered as securities in Switzerland. Although in this country, no license is needed to send or receive BTC, companies fulfill Swiss AML legislation.
Multiple major digital currency businesses have been set up in Zug such as Shapeshift and Xapo.
Singapore is well known for its open approach towards virtual currencies. Also, it is the most popular nation in terms of cryptocurrency users. In this country, all crypto trading platforms are required to collect user’s personal information for verification.
In Singapore, there are various places that accept cryptocurrency payments and BTC ATMs are present all over the country. The Monetary Authority of Singapore is progressing towards tax laws to bring virtual currencies under the tax scanner.
Estonia is a technologically advanced country as it has given birth to the popular Skype service. This country is also renowned as a leader in e-government as it has implemented internet voting way back in 2005. Estonia is now considering launching its own National Cryptocurrency i.e. Estcoin.
In this country, Bitcoin is considered as an alternative currency and not as a security. To do Bitcoin transactions, individuals and companies here are required to be registered as providers of business services. One of the most trusted platforms PCEX is also registered from Estonia.
The Bitcoin Association of Hong Kong has described Hong Kong as a region having reliable, predictable and hands-off regulations. Here regulations seem to be clear and simple. Therefore, BTC here is classified as a virtual commodity rather than a currency. According to the Bitcoin Association of HongKong, this means that cryptos here are unregulated by the existing financial observer.
Japan is the most passionate country in terms of crypto legalisation. This country has shown an active interest in the adoption, legalisation, and integration of digital currencies. Japan has numerous crypto exchanges and is very liberal. This country has earned its name to be the first in the world to approve BTC as legal tender.
Japan has various firsts to its name. The world’s first major Bitcoin exchange platform, Mt. Gox, was based in Tokyo. Satoshi Nakamoto, the inventor of Bitcoin, was also a Japanese pseudonym. Japan was also the first to pass broad regulation of its more than 32 crypto exchanges with the aim of improving their security.
Gibraltar is famous for two of its leading industries i.e. online gambling and financial services. Many blockchain-based companies including ICOs have also been attracted to this country as a good place for doing business. Gibraltar is planning to formulate a legal framework for the virtual currency business, which should bring more clarity on taxation issues.
In January 2018, Distributed Ledger Technology Regulatory Framework rules were formulated which granted a formal license to digital currency businesses in the country. Gibraltar Stock Exchange, in 2016, introduced an ETI (Exchange Traded Instrument) based on BTC known as BitcoinETI. The introduction of this instrument signified that Gibraltar is fully onboard with virtual currencies.
Bitstamp, a major international exchange was founded in Slovenia. This country has significant hydroelectric power. NiceHash, the well-known cloud mining service operates from here. Similar to other countries like Japan and Estonia, the government of Slovenia is also very welcoming towards cryptocurrencies.
In Slovenia, BTC and other digital currencies are categorised as virtual currencies. This means that Slovenia does not classify BTC either as money or security. Under the income tax laws, Bitcoin trading is not taxed. However, people who earn Bitcoin as a part of mining activities have to pay income tax on it.
The government of Belarus has welcomed cryptocurrency to develop the IT sector and attract foreign investment, businesses and talent. The Digital Economy Development Ordinance explains the country’s plan about it in detail. These new rules about governing crypto apply to those people and companies only who are registered residents of the Hi-Tech Park. This Hi-Tech Park is a special economic zone in the Minsk.
Under the Ordinance, Belarus has refused all taxes on income and transactions of digital currencies. This means that there will be no taxation of trading, mining and other business activities related to cryptos. This also involves business conducted with foreign countries.
When deciding on the location for your crypto asset business, it is crucial you analyse the government regulations of that region. The more clear and concise the regulations, the better it is to conduct business. Above mentioned countries offer a friendlier approach to this alternate investment instrument.