These Countries Are Not Very Crypto Friendly, But They Might Surprise You In 2024

These Countries Are Not Very Crypto Friendly, But They Might Surprise You In 2024

Cryptocurrencies are a new and disruptive technology that challenges the status quo and the established order of the world. While some countries have welcomed the innovation and opportunity that crypto offers, others have been more resistant or even hostile. The reasons for this hostility vary from country to country, but they often include factors such as:

One of the main reasons why some governments and central banks are reluctant or hostile towards cryptocurrencies is the fear of losing control over the monetary system and the economy. Cryptocurrencies are decentralized and peer-to-peer, meaning that no single entity can manipulate or interfere with the supply, demand, or value of the digital assets. This challenges the traditional role and power of governments and central banks to manage the money supply, influence interest rates, and stimulate or restrain economic activity.

Another reason is the concern about the security and stability of the financial system and the national currency. Cryptocurrencies are volatile and unpredictable, subject to market forces and speculation. They also pose a threat to the dominance and sovereignty of national currencies, especially in countries with weak or unstable currencies. Additionally, cryptocurrencies are vulnerable to cyberattacks, hacking, theft, and fraud, which could undermine the confidence and trust in the financial system.

A third reason is the worry about the legal and regulatory implications of crypto, such as taxation, consumer protection, and anti-money laundering. Cryptocurrencies operate outside the existing legal and regulatory frameworks, creating challenges and uncertainties for governments and regulators. How to tax crypto transactions and income, how to protect consumers from scams and losses, how to prevent money laundering and terrorism financing, and how to enforce compliance and accountability are some of the questions that need to be addressed.

A fourth reason is the lack of understanding and awareness of the benefits and potential of crypto. Many governments and central banks are not well-informed or educated about the advantages and opportunities that cryptocurrencies and blockchain technology offer. They may not fully grasp the innovation, efficiency, transparency, inclusivity, and empowerment that crypto can bring to various sectors and domains of society.

A last reason in my humble opinion is the preference for a centralized and hierarchical model of governance and authority. Cryptocurrencies are based on a distributed and democratic model of consensus and participation, where anyone can join, contribute, verify, and validate transactions. This contrasts with the centralized and hierarchical model of governance and authority that most governments and central banks are accustomed to and comfortable with.

Despite all the obstacles, the cryptocurrency market has been growing rapidly in the past few years, attracting investors, innovators and enthusiasts from all over the world. Bear in mind that not all countries have embraced this new form of money with the same enthusiasm and openness. Some governments have imposed strict regulations, bans or restrictions on the use, trade or mining of cryptocurrencies, citing concerns over money laundering, tax evasion, financial stability or national security.

In this article, I will explore some of the countries that are currently not very crypto-friendly but may become more so shortly.

China

China has been one of the most influential and controversial players in the crypto space, as it is home to some of the largest mining pools and exchanges in the world. However, the Chinese government has also been cracking down on the crypto industry since 2017, when it banned initial coin offerings (ICOs) and shut down domestic exchanges. In 2021, China intensified its efforts to curb crypto activities, banning financial institutions and payment platforms from providing services related to cryptocurrencies and launching a nationwide campaign to shut down mining operations. The Chinese authorities have cited environmental, financial, and social risks as the main reasons for their harsh stance on crypto.

However, some analysts believe that China may soften its attitude towards crypto in the future, as it seeks to promote its digital currency, the digital yuan, which is currently being tested in several cities and regions. The digital yuan is a central bank digital currency (CBDC) that aims to enhance the efficiency and security of the payment system, while also giving the government more control and oversight over the money supply and transactions. Some experts suggest that China may allow some degree of interoperability between the digital yuan and other cryptocurrencies, especially those that are compliant with its regulations and standards. This could create new opportunities for innovation and collaboration in the crypto space and increase the global adoption and influence of the digital yuan.

India

India is another country that has a large and vibrant crypto community but also faces significant regulatory uncertainty and challenges. India has not officially banned cryptocurrencies, but it has also not recognized them as legal tender or regulated them as assets or commodities. The Reserve Bank of India (RBI), the central bank, has issued several warnings and circulars to discourage banks and financial institutions from dealing with crypto-related businesses or individuals, creating difficulties for crypto exchanges and users to access banking services. I remember that RBI issued a directive prohibiting banks from providing services to crypto entities, effectively cutting off their lifeline. However, after approximately 2 years, the Supreme Court of India overturned this directive, ruling that it was unconstitutional and disproportionate.

Since then, the crypto industry in India has seen a resurgence of growth and activity, as more investors, traders and startups have entered the market. The legal status of cryptocurrencies remains unclear and ambiguous, as the government has been deliberating on a draft bill that proposes to ban all private cryptocurrencies in India, except for those issued by the state. The bill also proposes to create a framework for a CBDC, similar to China’s digital yuan. The bill has not been introduced or passed by the parliament yet, but it has created a lot of anxiety and confusion among the crypto community in India.

Some observers believe that India may not go ahead with such a drastic measure, as it would stifle innovation and growth in one of the most promising sectors of the economy. Instead, they argue that India may adopt a more balanced and nuanced approach to regulating cryptocurrencies, taking into account their potential benefits and risks. They point out that India has a strong tradition of entrepreneurship and technology development, and that it could leverage its talent and resources to become a leader in the crypto space. They also suggest that India may explore ways to integrate its CBDC with other cryptocurrencies, especially those that are aligned with its national interests and values.

Brazil

Brazil is another country that has a large and active crypto community but also faces some regulatory hurdles and challenges. Brazil does not have a specific law or regulation for cryptocurrencies, but it treats them as assets subject to capital gains tax and reporting obligations. The Central Bank of Brazil (BCB), the securities regulator (CVM) and other authorities have issued several guidelines and warnings to inform and protect investors and consumers from the risks associated with cryptocurrencies. However, they have also recognized their potential for innovation and inclusion in the financial system.

However, Brazil has also faced some political and economic instability in recent years, which has affected its crypto industry. Mercado Bitcoin had intended to launch its fintech expansion in 2021 but faced delays due to regulatory approval. On the day this announcement was made, Mercado Bitcoin was instructed to return more than 2,182 Bitcoin (BTC), valued at $59.3 million at the current time, to a group of investors. The allegations stated that a co-founder and former executive had allegedly held back funds in a falsified hacking incident back in 2013. In 2023, the Brazilian Senate approved new income-tax regulations that could mean citizens will face paying up to 15% on earnings from cryptocurrencies held on international exchanges, creating a compliance burden for the crypto industry.

Experts believe that Brazil may become more crypto-friendly in the future, as it seeks to improve its economic and social conditions. They note that Brazil has a large and young population, with high levels of internet and smartphone penetration, which creates a huge demand and opportunity for digital and financial inclusion. They also highlight that Brazil has a vibrant and diverse crypto ecosystem, with many startups, projects and initiatives that are developing innovative solutions for various sectors and segments of society. They also point out that Brazil may benefit from the regional and global trends in the crypto space, such as the adoption of Bitcoin as legal tender by El Salvador, or the development of CBDCs by several countries. They suggest that Brazil may adopt a more proactive and supportive stance towards cryptocurrencies, as it recognizes their potential for economic growth and social development.

Russia

Russia is another country that has a mixed attitude towards cryptocurrencies. The country has not banned crypto outright but has also not recognized it as legal tender or property. The Russian government has issued various warnings and guidelines about the risks and liabilities of using crypto but has also acknowledged its potential for innovation and development.

The Russian parliament has passed a law that defines crypto as a type of digital asset that can be used for transactions, but only through authorized operators. However, in my perspective, Russia might surprise the world in 2024 by becoming more crypto-friendly and open to the adoption and integration of technology. One reason for this could be the geopolitical implications of crypto, which could offer Russia an alternative to the US dollar and other Western-dominated currencies. Another reason could be the cultural affinity of Russians for crypto, which reflects their values of freedom, independence, and creativity.

In conclusion

Cryptocurrencies are a complex and controversial phenomenon that has different impacts and implications for different countries. Some countries are not very crypto-friendly now, but they might surprise us in 2024 by adopting a more open and positive attitude towards crypto.

This could happen for various reasons, such as:

– The realization that crypto is an inevitable and unstoppable trend that offers many benefits and opportunities for innovation, growth, and inclusion.
– The recognition that crypto is a competitive advantage and a strategic asset that can enhance the economic and geopolitical position of a country in the global arena.
– The adaptation and improvement of the legal and regulatory frameworks to accommodate and facilitate crypto activities, while ensuring the security and stability of the financial system and the national currency.

Therefore, we should not dismiss or underestimate the potential of crypto to transform the world and the future. We should also not assume that the current stance of some countries towards crypto is fixed or irreversible. Rather, we should keep an open mind and a curious eye on how the crypto landscape will evolve and change in the next few years.

 

Source: https://in.investing.com/analysis/these-countries-are-not-very-crypto-friendly-but-they-might-surprise-you-in-2024-200604991

What Factors Drive Governments' Hostility or Reluctance Toward Cryptocurrencies?

Anndy Lian highlighted that governments and central banks exhibit reluctance towards cryptocurrencies due to fears of losing control over the monetary system, security concerns, legal implications, lack of understanding of crypto's benefits, and a preference for centralized governance models.

How Has China's Stance on Cryptocurrencies Evolved, and What Might the Future Hold?

China has a historically strict stance on crypto, citing environmental and financial risks. However, experts speculate a potential softening as China explores its digital currency (digital yuan) and potential interoperability with compliant cryptocurrencies.

What Challenges Does India Face Regarding Cryptocurrency Regulations?

India grapples with regulatory uncertainty despite a vibrant crypto community. Legal ambiguity persists despite a Supreme Court ruling against the Reserve Bank of India's directive, creating anxiety and confusion within the Indian crypto sphere.

What's the Regulatory Landscape for Cryptocurrencies in Brazil?

Brazil views cryptocurrencies as assets subject to taxation and regulations. Political and economic instability in recent years has led to regulatory delays and compliance burdens for the crypto industry.

How Does Russia's Approach to Cryptocurrencies Differ from Other Nations?

Russia demonstrates a mixed attitude, acknowledging crypto's potential while issuing warnings about its risks. Speculation suggests Russia might embrace a more crypto-friendly approach in 2024 due to geopolitical considerations and cultural inclinations.

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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22 Crypto-Friendly Countries in 2023: Regulations, Taxes, and Adoption

22 Crypto-Friendly Countries in 2023: Regulations, Taxes, and Adoption

The world of cryptocurrencies is constantly evolving, and so are the regulations and policies of different countries. While some nations have imposed strict bans or restrictions on crypto activities, others have embraced the innovation and potential of digital assets. In this post, I will list 22 of the most crypto-friendly countries in 2023, based on their regulatory environment, taxation, and adoption.

1. Switzerland
Switzerland is a global leader in finance and innovation, and it has also become a hub for blockchain and crypto companies. The Swiss city of Zug, nicknamed “Crypto Valley”, hosts many prominent crypto firms, such as Ethereum Foundation, Cardano Foundation, Tezos Foundation, and more. Switzerland has a favorable regulatory environment for cryptocurrencies, with clear and supportive guidelines for initial coin offerings (ICOs) and token classifications. The country also offers low or no taxes on crypto profits for individuals and businesses.

2. Malta
Malta is another small European nation that has earned the reputation of being a “Blockchain Island”. The island nation has attracted some of the biggest names in the crypto industry, such as Binance, OKX, BitBay, and more, due to its progressive and comprehensive crypto regulations. Malta has enacted three laws that provide legal certainty and protection for crypto businesses and investors: the Virtual Financial Assets Act, the Innovative Technology Arrangements and Services Act, and the Malta Digital Innovation Authority Act. Malta also does not impose any capital gains tax on crypto transactions.

3. Estonia
Estonia is a Baltic country that has embraced technology and innovation. The country is known for its e-government services, such as e-residency, e-voting, e-health, and more. Estonia is also applying its digital-first approach to the cryptocurrency sector, by offering a licensing system for crypto exchanges and wallet service providers. Estonia has a low corporate tax rate of 20%, which is only payable on distributed profits. Additionally, Estonia does not levy any capital gains tax on the sale of digital assets.

4. Singapore
Singapore is a global financial center and a leading fintech hub in Asia. The city-state has also become a hotspot for crypto businesses and investors, due to its supportive and pragmatic regulatory framework. Singapore has introduced the Payment Services Act, which regulates crypto service providers under the supervision of the Monetary Authority of Singapore (MAS). The act also provides a clear distinction between payment tokens (such as Bitcoin), utility tokens (such as Ether), and security tokens (such as tokenized shares). Singapore also does not tax crypto profits for individuals, unless they are derived from trading activities.

5. Japan
Japan is one of the most advanced and mature markets for cryptocurrencies in the world. The country has recognized Bitcoin as a legal form of payment since 2017, and has implemented strict but clear regulations for crypto exchanges under the Financial Services Agency (FSA). Japan has also established a self-regulatory body called the Japan Virtual Currency Exchange Association (JVCEA), which sets standards and best practices for the industry. Japan imposes income tax on crypto profits for individuals, ranging from 15% to 55%, depending on the amount.

6. Canada
Canada is another North American country that has a friendly attitude towards cryptocurrencies. The country has a well-developed crypto ecosystem, with many local exchanges, start-ups, and communities. Canada has also introduced regulations for crypto businesses under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), which requires them to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and comply with anti-money laundering (AML) and counter-terrorism financing (CTF) rules. Canada taxes crypto profits as either income or capital gains, depending on the nature and frequency of the transactions.

7. South Korea
South Korea is one of the most active and enthusiastic countries for cryptocurrency trading and adoption in the world. The country has a large number of crypto exchanges, users, and merchants that accept digital currencies as payment. South Korea has also legalized and regulated crypto activities under the Act on Reporting and Use of Specific Financial Transaction Information, which requires crypto service providers to register with the Financial Services Commission (FSC) and partner with local banks to offer real-name accounts to their customers. South Korea taxes crypto profits as income at a flat rate of 20%.

8. Lithuania
Lithuania is a small Baltic country that has emerged as a leading fintech hub in Europe. The country has attracted many foreign crypto companies, such as Revolut, Wirex, Bitstamp, and more, due to its favorable regulatory environment and incentives. Lithuania has issued guidelines for ICOs and token classifications under the Bank of Lithuania (BoL), which oversees the crypto sector. The country also offers tax exemptions for crypto transactions that do not involve fiat currencies.

9. Portugal
Portugal is another European country that has a positive stance on cryptocurrencies. The country has created a welcoming environment for crypto users and investors, by exempting them from paying any taxes on crypto profits. Portugal’s tax authority, the Autoridade Tributária e Aduaneira (AT), has clarified that crypto transactions are not subject to value-added tax (VAT) or personal income tax. However, crypto businesses are still subject to corporate tax and VAT on their services.

10. The Bahamas
The Bahamas is a Caribbean island nation that has become a pioneer in launching its own central bank digital currency (CBDC), called the Sand Dollar. The Sand Dollar is a digital version of the Bahamian dollar, which can be used for peer-to-peer transactions, online payments, and cross-border remittances. The Bahamas has also introduced regulations for crypto service providers under the Payment Systems and Services Act, which requires them to obtain a license from the Central Bank of The Bahamas (CBOB) and comply with AML and CTF rules. The Bahamas does not impose any income tax or capital gains tax on individuals or businesses.

11. Germany
Germany is one of the largest and most influential economies in Europe and the world. The country has also shown a progressive and supportive attitude towards cryptocurrencies and blockchain technology. Germany has recognized Bitcoin as a legal form of payment since 2013, and has regulated crypto service providers under the Banking Act, which requires them to obtain a license from the Federal Financial Supervisory Authority (BaFin) and comply with AML and CTF rules. Germany also offers a tax exemption for crypto transactions that are held for more than one year.

12. Slovenia
Slovenia is a small Central European country that has a vibrant and innovative crypto community. The country hosts many crypto events, projects, and initiatives, such as the Bitcoin City, which is a shopping mall that accepts Bitcoin as payment. Slovenia has also adopted a friendly and flexible regulatory approach for cryptocurrencies, by allowing them to operate without any specific licenses or permits. However, crypto profits are subject to income tax or capital gains tax, depending on the type and frequency of the transactions.

13. Netherlands
The Netherlands is another European country that has a strong and active crypto scene. The country has many crypto exchanges, start-ups, and organizations, such as Bitonic, BitPay, Bitfury, and the Bitcoin Foundation. The Netherlands has also adopted a self-regulatory model for crypto service providers, by requiring them to register with the Dutch Central Bank (DNB) and adhere to AML and CTF rules. The Netherlands does not tax crypto profits for individuals, unless they are derived from trading activities.

14. Georgia
Georgia is a former Soviet republic that has become one of the leading countries in cryptocurrency mining in the world. The country has abundant and cheap electricity, which attracts many local and foreign miners to set up their operations there. Georgia has also introduced favorable regulations for crypto businesses, by exempting them from paying any taxes on their income or profits. However, individuals are still subject to income tax on their crypto earnings.

15. Luxembourg
Luxembourg is a small landlocked country in Western Europe that has a high standard of living and a strong financial sector. The country has also been supportive of cryptocurrencies and blockchain technology, by granting legal status to Bitcoin as a form of payment in 2016, and by regulating crypto service providers under the Law on Payment Services Providers, which requires them to obtain a license from the Commission de Surveillance du Secteur Financier (CSSF) and comply with AML and CTF rules. Luxembourg also taxes crypto profits as income at progressive rates.

16. Argentina
Argentina is a South American country that has experienced economic instability and currency devaluation for many years. As a result, many Argentinians have turned to cryptocurrencies as a hedge against inflation and capital controls. Argentina has also become a hotspot for crypto innovation and adoption, with many local exchanges, start-ups, and projects, such as Ripio, Bitso, RSK, Decentraland, and more. Argentina does not have any specific regulations for cryptocurrencies, but they are subject to income tax or capital gains tax depending on the nature of the transactions.

17. Cyprus
Cyprus is an island nation in the Mediterranean Sea that has a history of financial crises and bailouts. The country has also been one of the early adopters of cryptocurrencies in Europe, with many local businesses accepting Bitcoin as payment since 2013. Cyprus has also established itself as a hub for blockchain education and research, by hosting the University of Nicosia (UNIC), which offers the world’s first master’s degree in digital currency. Cyprus does not have any specific regulations for cryptocurrencies, but they are subject to income tax or capital gains tax depending on the type of transaction.

18. Taiwan
Taiwan is another crypto-friendly country in Asia, as it has a progressive and open-minded approach to crypto regulation and innovation. Taiwan does not impose any specific taxes or restrictions on crypto transactions, making it a favorable environment for traders and investors. Crypto businesses are also allowed to operate freely in Taiwan, as long as they comply with existing laws on AML/CTF and consumer protection. Taiwan is also home to many crypto influencers, such as Justin Sun of Tron, Changpeng Zhao of Binance and Arthur Hayes of BitMEX, as well as projects such as IOTA, VeChain and Kusama.

19. Indonesia
Indonesia is the largest economy and the most populous country in Southeast Asia, with more than 270 million people. Indonesia has a young and tech-savvy population, who are increasingly adopting crypto as a way to access the global digital economy. Indonesia has legalized crypto as a commodity that can be traded on licensed platforms, but has banned its use as a payment method. Indonesia also imposes a 10% VAT on crypto transactions, which could deter some users and investors.

20. Philippines
The Philippines is an archipelagic country with more than 7,000 islands and 110 million people. The Philippines has a large remittance market, as many of its citizens work overseas and send money back home. Crypto offers a cheaper and faster way to transfer money across borders, which has attracted many Filipinos to use it. The Philippines has a progressive and pragmatic approach to crypto regulation, allowing its use as a payment method and issuing licenses to crypto exchanges and service providers. The Philippines also has a vibrant crypto community, with many events, meetups and initiatives taking place there.

21. Hong Kong
Hong Kong is a major financial hub and a gateway to mainland China. The city has a relatively liberal and open attitude towards crypto, allowing its residents to freely trade and use digital assets without imposing taxes or restrictions. Hong Kong also has a thriving crypto scene, with many exchanges, funds, media outlets and events based there. The Hong Kong Monetary Authority (HKMA) is currently approaching the crypto industry from three dimensions: stablecoins that can be used for payments, investor protection, and how authorized institutions deal with digital assets. The HKMA plans to adopt a so-called “same risk, same regulation” approach to crypto.

22. Turkey
Turkey is another country that has shown a high level of interest and adoption of crypto in recent years. Turkey has one of the highest rates of inflation in the world, which has eroded the value and trust in its national currency, the lira. As a result, many Turks have turned to crypto as an alternative store of value and medium of exchange. Turkey does not have any specific laws or regulations for crypto, but treats it as an asset that is subject to capital gains tax. Turkey also has a growing number of crypto service providers and platforms that cater to its local market.

Summing up
In conclusion, the cryptocurrency landscape in 2023 is a dynamic and rapidly evolving space, with various countries positioning themselves as crypto-friendly destinations. From the innovative and regulation-savvy Switzerland to the progressive Malta and Estonia, and the bustling crypto scenes in Singapore, Japan, Canada, and South Korea, the global crypto map is expanding.

Each of these 22 crypto-friendly countries offers unique advantages for cryptocurrency enthusiasts, investors, and businesses. Whether it’s clear regulatory frameworks, low taxation on crypto profits, or a supportive ecosystem for blockchain technology, these nations are paving the way for the future of finance.

As the world continues to adapt to the ever-changing crypto landscape, it’s essential for individuals and businesses to stay informed about the latest developments and opportunities in these crypto-friendly jurisdictions. The choices made today can significantly impact the future of digital assets and financial innovation worldwide.

 

Source: https://in.investing.com/analysis/22-cryptofriendly-countries-in-2023-regulations-taxes-and-adoption-200598629

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j