Cryptocurrency and blockchain technology is a way for countries to establish themselves as an asset in an emerging market.
Whether they need a new currency to adopt to help them escape from the vacuum that is hyperinflation, or if they have been struggling to attract new businesses that can help boost their own economy, both of these scenarios can certainly be remedied by the adoption and facilitation of blockchain technology and cryptocurrencies.
There are a number of factors that can contribute towards a country being labeled as “crypto friendly” I’ll outline them first now and them we can go over specific countries and see how these factors affect the businesses in and the users of cryptocurrency there.
Firstly and probably most obviously has to do with taxes.
- How does the country label cryptocurrencies? As property? as legal tender? as nothing?
- In turn, how does this affect the profits of those who trade with and use cryptocurrencies?
This next one is a huge factor for many blockchain based companies to consider if they want to base their operations in any country, that is, regulations.
- Are they very strict? Suffocating almost?
- Are they lax? Are they so relaxed that it could end up cracking down in the future and ultimately trap some companies into situations that they suddenly deem illegal?
Another factor to consider is the overall sentiment toward and use of cryptocurrencies in that country?
- Are there very many business that accept cryptocurrencies as a form of payment?
- Are there very many citizens who are aware of cryptocurrencies and use them or want to use them?
One other factor that might seem unimportant but can certainly play an effect is the cost of electricity and availability of renewable or alternative sources of energy.
- You’ll soon discover that places with cheap electricity or places with access to things like hydroelectricity will be very alluring for things like mining farms and operations that require lots of computing power.
Now that we’ve got a little list of factors to consider, let’s take a look at some specific countries and how they are setting themselves up to take advantage of this new kind of market and economy.
Zug is now known as Crypto Valley. It's more than just a play on words similar to Silicon Valley. It’s actually a government backed association that was created to help facilitate blockchain based companies and their growth in the area.
Cryptocurrencies here are Tax-free and blockchain based companies can enjoy favourable regulations as well.
Zug is home to Tezos, Ethereum, ShapeShift and others as well.
Like Switzerland has a less restrictive outlook on cryptos. In fact, they are altogether tax free and also free from regulations there.
But the government there does often warn its citizens of the speculative nature of cryptos, again, despite this, the citizens can still enjoy tax free trading and gains.
Amsterdam is where you can find a "Bitcoin Embassy” so this is obviously home to some Bitcoin maximalists.
Also, Amsterdam has quite a high density of Bitcoin ATMs.
Regulations here have yet to kick in and the government here, like many others around the world, is experimenting with its own cryptocurrency as well.
Has had a hands-off approach in regards to governmental regulations and this has so far resulted in a thriving crypto community in London.
The crypto communitites there have combined to form CryptoUK, a self-regulatory body in an attempt to prevent government intervention and to provide and promote “best practices” for the industry.
You might be surprised to find this one on the list, but it’s countries like these that have the most to gain for establishing themselves as a crypto hub. Georgia is also home to one of the top Bitcoin mining farms, Bitfury.
Japan was once considered to be very crypto “friendly” and many may still see it that way. There’s no denying the amount of merchants who accept Bitcoin there and all of the advertisements that promote the cryptocurrency, but the tides might be turning.
Very recently, the Japanese government has decided to ban privacy focused cryptocurrencies from being listed on Japanese exchanges.
Japan legally recognises crypto as legal tender and offers a liberal regulatory environment, except for this more recent ban.
For those of you residing in the U.S. you probably noticed that it isn’t listed here.
It actually isn’t found on many other lists of crypto-friendly countries either.
- Perhaps it’s the fact that there isn’t a whole lot of clarity in regards to how they will regulate it.
- Perhaps it’s the fact that despite this uncertainty of regulations, there is a certainty that your gains will be taxed.
- Perhaps it’s the fact that the U.S. has the power and quite often the motivation to restrict things like cryptocurrencies.
Regardless, here’s a list of cities and states in the U.S. whose local governments and local cryptocurrency groups have put forth the effort to be crypto friendly despite the ominous threat that the Federal government exudes:
is a state where you can find a whole bunch of Bitcoin ATMs.
is home to tight knit groups of cryptocurrency enthusiasts
has been in the news in the past for their own Crypto friendly tax laws
allows you to pay taxes with Bitcoin, Litecoin, and any other cryptos as well.