How Do Countries Become More (Or Less) Crypto-Friendly?

There are now more than 9,000 cryptocurrencies being traded in the marketplace with a total market cap that often exceeds more than $1bn, but despite crypto being billed as the “future of money,” there are still countries that are deemed to be either more or less friendly for investments.

When trading crypto, investors often research countries based on their perceived friendliness to digital currencies to determine whether it is safe and prudent to trade and use them there. Crypto adoption varies significantly between regions and traders are more likely to be averse to using their assets in countries where skepticism about crypto persists.

How Do Countries Become More (Or Less) Crypto-Friendly

A country can become more or less friendly over time depending on a range of factors. Those at the top of the list generally display enthusiasm for crypto at an institutional level, have extensive exchange and wallet availability, regulations in place that favors digital currency and a transparent financial system. Many pro-crypto countries also have a buoyant financial sector with crypto-based instruments, services and products.  

It’s for this reason that Bermuda is viewed as one of the most crypto-friendly locations. Bermuda recently implemented a comprehensive regulatory regime to govern and support the development of digital assets while also ensuring that any income or capital gains from cryptocurrency transactions are not taxed. Slovenia also doesn’t tax individual gains from trading to boost investments from abroad.

A readiness to accept payments from cryptocurrency businesses also makes a country favorable. This is true in Switzerland, which was the first to open business accounts for companies specializing in digital currencies. Switzerland also has a cluster of important cryptocurrency investors and startups with links to blockchain centers in other countries. This nationwide ecosystem is called “Crypto Valley”.

As crypto-friendliness can change over time, it is important to keep up to date with breaking stories about cryptocurrency. Reading the latest cryptocurrency news from a leading research and advisory firm will give you trustworthy and authoritative insights into crypto and, perhaps most crucially, inform you when a country has received regulatory approval for currencies such as Ethereum and Bitcoin.

In contrast, it is also possible for countries to become less crypto-friendly, as evidenced by the recent push for legislation in Hong Kong, which has prompted investors to flee to “safe havens” in close proximity, such as Singapore. Hong Kong is now seen as a less attractive proposition for traders after lawmakers moved forward with plans to require crypto platforms to acquire licensing to operate.

Padraig Walsh, who works for Tanner De Witt, a law firm in Hong Kong, says the city used to be a primary hub for crypto trading and crypto-related business. He notes: “That isn’t the case any more, and I think regulation has been a key part of the reasons why.”

Many of the factors that can make a country open to crypto can also make a country more hostile or at least ambivalent to digital currency when they are absent. Researching countries based on these factors and keeping up to speed with development in crypto adoption will help you to identify the regions that are best for trading these currencies.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan