In recent years, the world of cryptocurrencies has experienced tremendous growth in popularity and awareness. More…
Let’s take a blog tour of the most crypto-friendly countries!
Welcome back CryptoCoin Believers! Another day, another Crypto slay! We have been really technical in our recent posts. So, let’s do a laidback discussion with this one.
We all know that countries in the world have different monetary policies and hold diverse outlooks on cryptocurrency.
Governments all over the world have had different responses to crypto trading and crypto transactions. Some chose to become crypto tax-free countries. Others opened up their economies to become crypto-friendly countries.
Let’s take a look at which countries have embraced cryptocurrency in their economy.
We think it is not surprising that SG will be high on the list of countries that are cryptocurrency-friendly. Undoubtedly, Singapore has long established itself as a business-friendly region with a focus on building entrepreneurship and making financial institutions flourish.
Additionally to that, Singapore has one of the numerous registered cryptocurrency exchanges indicated in the report of Crystal, a Bitfury blockchain analytics site.
Instead of censoring or banning crypto, the central bank (Monetary Authority of Singapore) chooses to keep a close eye on it to prevent anyone from committing criminal acts because they believe that virtual currencies are good investments. Additionally, the Monetary Authority of Singapore is putting together policies that will help balance Singapore’s present economic structure with the booming cryptocurrency network.
Malta is the largest of three islands situated south of Sicily. Its Mediterranean weather and scenic landscapes make it one of the sought-after destinations in Europe.
Malta is a member of the European Union. Hence, it is a conducive location for blockchain projects and digital currencies. Cryptocurrency programs can build their base in Malta and operate from anywhere within the EU.
Since 2018, Malta has implemented monitoring regulations enforced by specific government agencies. There are 3 components to their regulations: The Virtual Financial Assets Act (VFAA), Malta Digital Innovation Authority (MDIA), and the Innovative Technology Arrangement and Services (ITAS) Act.
These detailed monitoring schemas drawn up by Malta are the first of their kind and aim to address the complaints about cryptocurrency’s unpredictability and yet unforeseen risks. Obviously, Malta is cautious. Thus, they implement crypto regulations while still maintaining a cryptocurrency-friendly stance.
This European country holds the number one spot for being Bitcoin-friendly. Their government bolsters the assimilation of blockchain tech in its numerous projects and programs. Furthermore, Slovenia also holds the highest cryptocurrency market cap and has displayed a high success rate for blockchain startups.
Selling Bitcoin cannot be considered a form of income that’s why people don’t need to pay taxes for it. But, companies receiving crypto payments are obligated to pay corporate income tax, and ICOs are taxed as well. It should be noted that Slovenia is also home to the world’s first crypto-friendly mall, BTC City Shopping Mall where all stores and merchants accept Bitcoin as a legally accepted payment and operate using blockchain technology.
A Ljubljana-based innovation, GoCrypto, helps merchants to specify prices and receive money in euros while allowing clients to pay using more than 50 cryptocurrencies. GoCrypto provides the merchants’ protection from the volatility of crypto yet at the same time it advocates for ease of payment on the customer’s side.
Home to the Swiss Alps and especially, the largest blockchain ecosystem in the whole world. Undoubtedly, This country has a huge potential to be a global cryptocurrency leader with its forward-thinking stance towards utilizing cryptocurrency in a safe manner.
Swiss Federal Tax Administration (SFTA) categorized cryptocurrency as an asset thereby subjecting it to wealth, income, and capital gains taxes. Cryptocurrency exchanges obtain legal status only if authorized by Swiss Financial Market Supervisory Authority (FINMA). Also, they passed the Blockchain Act into law last 2020. According to the Blockchain Act, tokens to be transferred into a blockchain must comply with the standards and requirements of the local Initial Coin Offering (ICO), Anti-Money Laundering (AML), and Combatting the Financing of Terrorism (CFT).
Switzerland established its “Crypto Valley” located in Zug City in July 2013. Consequently, they launched their blockchain-powered digital identity program in 2017.
Bermuda has made its mark as the first country ever to allow cryptocurrency as payment for taxes and fees. They released the Digital Business Act in 2018 created the legal structure guiding cryptocurrency users in buying, selling, and investing. The DBA monitors the Digital Asset Business (DAB) and gives licenses to business activities related to digital assets.
Currently, Bermuda is tax-free. It does not charge income tax which makes it a viable locale for digital businesses. Bermuda’s future with cryptocurrency is seen as positively progressive because, in February 2021, they launched Hashdex Nasdaq Crypto ETF.
Best Tax-Friendly Countries
There are countries that don’t tax crypto investors and companies for buying, selling, or trading Bitcoin and other cryptocurrencies.
Belarus took extraordinary measures toward crypto companies and crypto exchanges in 2018 when they classified all transactions related to cryptocurrency as personal investments which made it exempt from capital gains tax and income tax.
The Cayman Islands is also a well-renowned place for investors. They impose no kind of tax for the holding, purchase, or transfer of digital assets. Furthermore, Cayman has its Virtual Asset (Service Providers) Act. It serves as the legal schema to guide the setup of digital assets.
Other countries that are crypto-tax-free are the following: Germany, Puerto Rico, and Portugal.
In the first quarter of 2022, Germany ranked first on Coincub’s list of cryptocurrency-friendly countries. Germany was the first country to harness the blockchain’s potential for progressive financial technology. Additionally, 2.6% of Germans used cryptocurrency at the end of 2021. While a Kucoin report showed that 44% of Germans are impelled to start investing in cryptocurrencies.
It is important to note that Puerto Rico is part of the United State’s territories. Puerto Rico gives large tax breaks to people who stay on their island for a minimum of 183 days on an annual basis. Aside from the tax breaks, Puerto Rico lures crypto investors with a promising island lifestyle.
Lastly, Portugal is also a haven for investors. Before last month, Portugal didn’t impose taxes on cryptocurrencies. But this October, their national government proposed a 28% capital gains tax for investors owning crypto assets for less than one year.
Wrap-up for Crypto-Friendly Countries
Finally, Bitcoin became legal in the United States in June 2021, and citizens can buy, sell or invest in cryptocurrency so long as they follow the regulations set. In the Central African Republic, Bitcoin became a legal tender just last June 27.
These countries are taking a step in the right direction by choosing to act as a supervisory instrument in the existence of Bitcoin in their territories. Besides, When governments keep an open mind towards technology, it offers their citizens more pathways to progress.
It is still a possibility that other crypto tax-free countries will change their mind similar to Portugal. Until now, governments still haven’t reached final decisions on how they will manage cryptocurrencies. Therefore, this definitely means that more changes are coming soon.
If properly managed, for instance, like the establishment of a financial action task force, cryptocurrencies can improve the access of lower social classes to financial services and improve people’s socioeconomic mobility for the long term.