The world’s biggest and most powerful countries are currently wrestling with the legal, financial, and structural challenges presented by an increasingly cryptocurrency-ready global economy. In some countries, such as China, cryptocurrency is often seen as a serious threat to the nation’s banking system, and effectively banned from everyday use. Other countries — notably the U.S. and the U.K. — have taken a lukewarm interest in the potential of the blockchain technology. A few countries, however, have gone all-in on cryptocurrency and its related tech, even offering strong tax and other incentives for crypto-using businesses to invest there.
In this article, we’re taking a look at five countries that have fully embraced the potential of cryptocurrency.
1. Bermuda: With a population of just 71,000, the island nation of Bermuda isn’t exactly known for being on the cutting edge of technology. Most of the country’s population works in the tourism industry, and the vast majority of those businesses don’t accept BTC or other cryptocurrencies. So why is Bermuda on this list? Because Bermuda is also widely considered a tax haven, and it has very few financial regulations. Thus far, the country’s government has also taken a decidedly hands-off approach to regulating the cryptocurrency-based businesses operating there. As a result, Bermuda has attracted some big players to the island — at least on paper, for tax purposes — including major cryptocurrency exchange Binance.
2. Switzerland: The Swiss have a well-earned reputation for doing things their own way. They’ve been officially neutral in military, political, and economic matters since 1515 — over 500 years — even famously refusing to join the European Union, as it would mean entering into binding international treaties. The Swiss banking industry is also notoriously secretive, although this has become less true in recent years. Interestingly, the Swiss were among the first European nations to officially experiment with cryptocurrency payments, even designating the canton of Zug as a special “Crypto Valley” economic area for crypto experimentation. Swiss tax law also treats cryptocurrency payments as regular income, and only professional cryptocurrency traders are subject to capital gains taxes on crypto trades.
3. Singapore: Singapore has long been a major trading hub in Southeast Asia, with a financial and tax system that can be extremely welcoming to foreign business. The island country has also invested heavily in building its technology sector, with a focus on financial technology. As a result, Singapore has a huge number of cryptocurrency-related startups — particularly in the remittance sector — serving customers across Asia and Oceania. The government has also taken a wait-and-see approach to cryptocurrency regulation, taxing it like property rather than a currency.
4. Malta: One of the very first countries to embrace cryptocurrency, the island of Malta remains a stronghold for European crypto investments. Like many other countries on this list, Malta is widely viewed as a tax haven — foreign residents aren’t subject to capital gains or income taxes — making it an ideal location for the legal home base of a global cryptocurrency business. The country has also aggressively courted cryptocurrency-based businesses, with Malta’s Economic Minister declaring it “The Blockchain Island” in 2018.
5. Belarus: The former Eastern Bloc nation has come a long way since declaring independence from Russia in 1990, veering away from its former manufacturing-based economy to instead focus on technology. In 2017, the country even created a special economic zone around the city of Minsk, specifically highlighting the need for development of cryptocurrency tech like blockchains, cryptocurrencies, ICOs, and smart contracts. Blockchain and cryptocurrency technology was officially legalized in the country in 2017, and all cryptocurrency-related taxes have been waived until 2023.