5 of the most crypto-friendly countries in 2022

Of CNBCTV18.com September 20, 2022, 07:56 IST (published)

Cryptocurrencies have taken the world by storm. Since Bitcoin was launched in 2009, more than 10,000 different crypto projects have emerged, some of which have witnessed an exponential rise in popularity and value. As such, the global market capitalization of the crypto industry currently stands at a whopping $1 trillion. This growth has led to more and more people pouring money into these digital assets.

However, due to a lack of regulations and legal compliance, some countries are unwelcoming to cryptocurrencies. Some nations have even cracked down on crypto activities such as mining and heavily taxed profits arising from these digital assets. Fortunately, as regulation and mainstream adoption increases, more nations are moving toward favorable legislation for cryptocurrencies.

We covered some of the early movements in this space last year. However, a lot has changed since then, which warrants a revamped list of crypto-friendly countries you should know about.

Top 5 Crypto Friendly Countries

Crypto-friendly nations implement laws and tax policies that promote the use and development of cryptocurrencies. These countries also support crypto-related businesses and investments.

Portugal

Portugal is one of the most popular crypto-friendly destinations in the world. It is a hotspot for crypto traders and investors. But what brings them here? Portugal does not tax individuals on profits made from buying or selling cryptocurrencies. In addition, there is no tax when exchanging one cryptocurrency for another.

There is also a burgeoning community of cryptocurrency enthusiasts present in Portugal. The country has several crypto and blockchain incubation spaces, such as The Block (Lisbon) and The Blockchain Center (Porto). These arenas provide a common ground for crypto enthusiasts and blockchain developers to interact and network. They also offer frequent training and support measures.

Tonga

Following in El Salvador’s footsteps, the island nation of Tonga is on its way to accepting Bitcoin as legal tender. In a series of tweets in January 2022, former MP Lord Fusitu’a announced the game plan and ETA for Bitcoin to be accepted as legal tender in Tonga. According to him, Bitcoin should be legally accepted as a means of payment by October 2022.

As an island nation, Tonga receives a lot of money through foreign remittances. The number of Tongans living outside the country is more than the population of the country. For this reason, approximately 30 percent of household income is received through foreign remittances. Accepting Bitcoin as legal tender will make this process more efficient and cheaper. As an isolated island nation, Bitcoin can also help create a circular economy. With proper regulations planned for the future, the country seems to be embracing modern technology and innovations.

Singapore

Singapore is one of the most crypto-friendly countries in Southeast Asia. It is also one of the world’s most stable economies and is a hub for fintech companies. The country encourages innovation, which can be seen in their pro-crypto stance.

Profit tax is not imposed on cryptocurrencies. Individuals and companies holding cryptocurrency funds are also exempt from taxation. However, if a business receives payments in cryptocurrency or trades in cryptocurrency, they are liable to tax. The country is also home to many crypto companies such as Kyber Network, Qtum, Zilliqa, Crypto.com, etc.

Slovenia

In April 2022, Slovenia unveiled a plan for a flat tax policy for cryptocurrencies. According to the proposal, profits from the sale or exchange of cryptocurrencies will be taxed at less than 5 percent of the sale/exchange value. According to the press release announcing the proposal, if the new legislation is passed, Slovenia will become “one of the few countries, if not the only country in the world with such a simple taxation” for digital currencies.

Switzerland

Switzerland is considered to be one of the most crypto-friendly nations in the world. Swiss banks were among the first in the world to accept Bitcoins and provide crypto companies with business accounts. The city of Zug is home to hundreds of crypto startups and projects such as Solana, Polkadot and Cardano, to name a few. Switzerland is also home to 14 crypto unicorns and is called the “Crypto Valley” of Europe. The co-founders of Ethereum also first met in Zug.

In 2021, the country passed its ‘Blockchain Law’, which provides a regulatory framework for cryptocurrencies. This has attracted many crypto projects and startups to Switzerland.

Conclusion

On the one hand, major economies such as China, Russia and India are cracking down on cryptocurrencies by introducing strict regulations or tax policies. While on the other end, more and more countries are adopting digital assets and becoming crypto-friendly. This increased crypto adoption could pave the way for global acceptance of these digital assets.