5 of the most crypto-friendly countries in 2022

By CNBCTV18.com IST (Released)

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

Cryptocurrencies have taken the world by storm. Since Bitcoin’s launch in 2009, over 10,000 different crypto projects have sprung up, some of which have seen an exponential increase in popularity and value. As such, the global market capitalization of the crypto industry currently stands at $1 trillion. This growth has led more and more people to invest money in these digital assets.

However, due to a lack of regulatory framework and legal compliance, some countries are not very accommodating towards cryptocurrencies. Some countries have even cracked down on crypto activities such as mining and heavily taxed profits derived from these digital assets. Fortunately, as regulation and widespread adoption increases, several countries are moving towards crypto-friendly legislation.

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

Top 5 crypto-friendly countries

Crypto-friendly nations implement tax laws and 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 through the purchase or sale of cryptocurrencies. Also, there is no tax when one cryptocurrency is exchanged for another.

There is also a budding 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 places provide a common ground for crypto enthusiasts and blockchain developers to interact and network. They also offer frequent training and support initiatives.

Tonga

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

Being an island nation, Tonga receives a lot of money through foreign remittances. The number of Tongans living outside the country is greater than the population inside the country. For this reason, about 30% of household income comes from remittances abroad. Accepting Bitcoin as legal tender will make this process more efficient and cheaper. Being 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 most stable economies in the world and a hub for fintech companies. The country encourages innovation, which can be seen in its pro-crypto stance.

Capital gains tax is not levied on cryptocurrencies. Individuals and businesses with cryptocurrency funds are also exempt from tax. However, if a business receives cryptocurrency payments or conducts cryptocurrency transactions, it is subject to income tax. The country is also home to many crypto companies like Kyber Network, Qtum, Zilliqa, Crypto.com, etc.

Slovenia

In April 2022, Slovenia unveiled a flat tax policy plan for cryptocurrencies. Under the proposal, profits from the sale or exchange of cryptocurrencies would be taxed at less than 5% 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 simple taxation” for digital currencies.

Swiss

Switzerland is considered 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 Ethereum co-founders also met for the first time 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 imposing strict regulations or tax policies. While at the other end, more and more countries are embracing digital assets and becoming crypto-enabled. This increased adoption of crypto could pave the way for global acceptance of these digital assets.

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