Since the creation of Bitcoin as a digital currency in 2009 by the mysterious Satoshi Nakomoto, several thousands of cryptocurrencies have been created using innovative blockchain technologies. The invention of the crypto industry provided solutions to various problems plaguing the traditional finance system driving its adoption by thousands of people globally.
Today, many countries use cryptocurrencies, but some stand out as the most crypto friendly countries in the world. In this article, you'll learn about the top crypto countries as follows:
- UAE
- Portugal
- Turkey
- Switzerland
- Bahrain
- Singapore
- Indonesia
- Malta
- India
UAE
When it comes to becoming the next biggest crypto hub globally, the United Arab Emirates takes the spot, and the Emirate of Dubai stands as the center of attraction. Beyond the luxurious atmosphere, the tourist attractions like Burj Khalifa or Palm Jumeirah, the billion-dollar empires, and business owners have made Dubai a perfect place for business and global conferences. From the 2021 Crypto Expo Dubai and World of Web 3 Summit to the recent Binance Blockchain Week, the UAE continues to be a preferred location for Cryptocurrency conferences.
In recent years, the government has made efforts to position the UAE as a major crypto country by establishing several crypto-friendly policies. The Dubai Multi Commodities Center (DMCC) established a center in Dubai for crypto trading and other blockchain activities fully supported by the government. Because the UAE is fast becoming one of the top cryptocurrency friendly countries, crypto exchanges like Binance and Crypto.com have sought approval to establish a regional headquarters in Dubai.
Portugal
Portugal is one of the most likable crypto countries by crypto enthusiasts, and it's for a very good reason. Ranking as one of the best crypto friendly countries in Europe, Portugal's policies concerning cryptocurrency are very favorable. They allow crypto trading without taxing traders on capital gains except for crypto gains gotten through regular income.
Exchanging one cryptocurrency for another or a fiat currency is also tax-free in Portugal. Although cryptocurrencies are not accepted as legal tender, crypto traders can buy and sell crypto tax-free. There are currently no laws against crypto mining in Portugal, and Lisbon, the central crypto hub, is a major attraction to crypto enthusiasts willing to settle in a cryptocurrency tax-free country. Portugal offers the following benefits for foreigners:
- 0% tax on crypto trading
- 0% tax on foreign-sourced dividends
- 0% tax on foreign-sourced income
- 10% tax on foreign-sourced pension
- 20% tax on freelancing
- No minimum stay requirement
- Permanent residence can be granted after five years of residency.
Turkey
Although cryptocurrency has been around in Turkey since 2009, massive crypto adoption was low until the 2020s, when exchange rates increased rapidly, and inflation hit the country. 2021 was a turbulent year for the Turks as their national currency, the Turkish Lira, tumbled, losing 40% of its value, and inflation is now at a roaring 70%. Today, Turks invest in cryptocurrency to hedge against the rising inflation and protect their money's value and purchasing power.
Today, Turkey is a fast-rising crypto country as there are no restrictions on the trading or mining of cryptocurrencies. However, the Turkish government banned the use of cryptocurrencies to pay for goods and services. The restrictions on crypto to buy products or pay for services were made in April 2021, while trading of cryptocurrencies on crypto exchanges and physical locations was permitted.
BtcTurk is the oldest legalized crypto exchange in Turkey, and Coinbase is currently negotiating to buy the exchange for about 3.2 billion dollars—a step to further promote the crypto industry in Turkey.
Switzerland
Bitcoin is the world biggest crypto with friendly acceptance across countries, and Switzerland stands out as one of the best bitcoin friendly countries. In Switzerland, some regions accept Bitcoin as legal tender, and cryptocurrencies are generally classified as assets all over the country.
Popularly called the crypto valley, Zug is the central hub of crypto entrepreneurs, and they get to enjoy a tax-free environment for crypto trading. Zurich, another city in Switzerland, makes capital gains on movable private wealth tax exempt. Lucerne, like Zurich, also treats capital gains as tax-exempt, while Bern has less lenient policies towards cryptocurrency and taxes crypto mining as regular income. In essence:
- Trading cryptocurrencies via licensed professional traders are seen as business income and is taxed as such.
- Crypto mining is also seen as a source of income and is taxed.
- A wealth tax on the net worth of individuals is collected, but no capital gains tax is inclusive.
One favorable thing about Switzerland is that if you're an individual crypto trader, you won't be taxed capital gains for trading or holding crypto as an investment.
Bahrain
The Kingdom of Bahrain, an island country in the middle east, has managed to make its way into our list, which aims to highlight the best country for cryptocurrency. Bahrain is a crypto-friendly country that permits the buying and selling of cryptocurrencies but regulations regarding cryptocurrency mining and tax on crypto activities remain unclear.
The Central Bank of Bahrain (CBB) published a report that supports the operations of crypto exchanges and other crypto-related businesses or services in Bahrain, provided they follow the stated licensing guidelines. The regulations aimed to reduce the risk of financial crimes and unauthorized use of crypto assets.
Given this recent development, the CBB granted Binance a crypto asset service license to operate in Bahrain in March 2022, a move experts believe will pave the way for other exchanges to establish their presence in the country. One thing is for sure, Bahrain is one of the countries rising fast as a crypto country in 2022.
Singapore
It's not hard to identify the reasons why Singapore is among the countries that are crypto friendly. The thriving shipping center has one of the most stable and robust economies with a good rate of crypto adoption. The increase in crypto traders and miners and the establishment of crypto-friendly policies have made Singapore one of the most crypto friendly countries.
The government monitors the state of cryptocurrency in the country and carefully guides against illegal activities and fraud by creating a balanced and legal environment for cryptocurrency.
In Singapore, there are no capital gain taxes on the trading of cryptocurrencies, and when cryptocurrency is used for the payment of goods and services, no taxes are placed on the payment. However, in March 2022, the Finance minister announced that taxes would be placed on NFT trading but not on capital gains from NFTs.
Generally, individuals and corporation funds are not taxed on cryptocurrencies unless they function as a trading company or provide services that receive crypto payments; then, they are charged with income tax.
Indonesia
The Republic of Indonesia, a country on the Asia Continent, is regarded by many as part of the crypto friendly countries. And there's a good reason for this; the country fully supports the buying and selling of cryptocurrencies but for investment purposes alone.
Although crypto trading is considered legal in Indonesia, financial institutions are not permitted to use or market cryptocurrencies. The central bank does not authorize it as a payment medium; instead, cryptocurrency is regarded as a commodity.
On April 1, 2022, the Indonesian government announced new tax regulations on cryptocurrencies, including a 0.1% tax on capital gains from cryptocurrency investments and VAT on crypto purchases.
According to Statistica, the majority of the population in Indonesia are Muslim, 87% to be exact. The Nation's Ulema Council, the country's Islamic body, stated that cryptocurrencies are forbidden because they have no physical form, no true value, nor can they be given physically to a buyer or seller for financial transactions.
Generally, cryptocurrency is legal in Indonesia, and there are no laws banning crypto mining, making Indonesia one of the best countries crypto friendly.
Malta
When considering which countries are crypto friendly, Malta stands as one of the most preferred countries favorable for crypto enthusiasts. Malta is the crypto haven for blockchain tech and cryptocurrency innovations. The government recognizes Bitcoin and other cryptocurrencies as a medium of payment. The regulations on cryptocurrencies are quite lenient and favorable, making Malta one of the best bitcoin friendly countries.
Companies that include cryptocurrencies as part of their trading stock are taxed on capital gains. Rewards on crypto mining are also taxed as regular income. However, long-term holding of a coin by both residents and non-residents is not taxed.
When companies offer initial coin offerings, these ICOs are regarded as similar to the regular raising of capital, and the companies are not taxed. Crypto trading is legal in Malta and tax-free, making it one of the most crypto-friendly countries.
India
India might not rank high as one of the countries with crypto friendly regulations when considering the reactions to the recent announcements by the government. However, it belongs to the list of the top crypto countries as it legalizes cryptocurrency and has some favorable crypto policies.
Mining cryptocurrencies in India is not against the law, nor is the trading of cryptocurrencies. Hence, individuals are authorized to mine and trade cryptocurrencies but with some costs. The country places a 30% tax on capital gains from the transfer of cryptocurrencies and NFTs. At the same time, transactions involving cryptocurrencies are charged 1% in tax. Gifts in cryptocurrency or other virtual assets are not left out, as they are also taxed.
When the Indian government released the new tax regulations, it led to a significant drop in cryptocurrency users on various crypto exchanges. Beyond the uncertainty of the recent development in the crypto industry in India, more people are entering the crypto space, and the future of crypto in India looks positive.
Conclusion
We've outlined some of the best crypto friendly countries 2022, and a common theme in all these countries are lenient laws on trading and mining cryptocurrencies. Some countries are working on creating licensing programs before permitting the establishment of crypto exchanges in their country like Bahrain did, while others are working on licensing crypto mining operations like the Central African Republic.
The future of cryptocurrency from a global perspective is positive as more countries legalizing cryptocurrency mean a higher influx of people into the crypto space. Hence, the best time to invest and mine is now, as cryptocurrencies are expected to rise rapidly in value over time.
You can also explore crypto mining as a profitable way to make money. A simple way to get started with Bitcoin mining is by using Bitcoin hosting services. A hosting service allows you to start mining right away while saving you money on equipment and other necessary mining software.
