Sovereign nations and policy makers remain divided about the rise of digital assets. Even as popular cryptocurrencies such as Bitcoin and Ethereum become more mainstream, some countries have pushed back against this nascent sector. At the moment, China, Russia and Vietnam seem to have the most antagonistic approach to cryptocurrencies. However, other nations have fully embraced this technology, which has helped them attract talent and capital from across the world.
Here are the most crypto-friendly nations in 2021.
The Central American nation of El Salvador tops the list, unsurprisingly. This month, President Nayib Armando Bukele introduced a bill to make Bitcoin legal tender in the country. This move would have far-reaching consequences. Companies operating in El Salvador, including Apple, Netflix and Google, would have to quote prices in BTC and accept it as payment from Savadorans. Citizens also expect to slash fees for remittances from abroad, which constitute roughly 20% of the nation’s GDP.
Malta hasn’t declared BTC legal tender yet, but was earlier than most countries in its blockchain adoption. During the 2017 bull market, Malta declared itself “Blockchain Island,” and adopted crypto-friendly policies that would attract entrepreneurs and developers to its shores. Malta is now a hub for several crypto startups, decentralized exchanges and ICO projects. The nation’s favorable policies and low taxes on digital assets makes it an unparalleled crypto hub.
Canada’s adoption of Bitcoin and digital assets may be more comprehensive than any other developed nation. The country took an early lead by approving several Bitcoin and Ethereum exchange-traded funds (ETFs) for the Toronto Stock Exchange (TSX). These listings allow ordinary Canadians to hold digital asset derivatives in their tax-shielded investment accounts.
Another facet of Canada’s adoption is its burgeoning crypto mining sector. Prominent miners such as HIVE Blockchain Technologies, Hut 8 Mining and Argo Blockchain have either listed their shares on the TSX or have mining rigs located in Canada to leverage the country’s hydroelectric energy grid.
As one of the world’s most critical financial hubs, Singapore’s adoption of crypto-friendly regulations has been a game-changer. The Monetary Authority of Singapore allows some cryptocurrency companies to operate without a license under the Payment Services Act. This means these companies can operate with minimal regulatory burden for a grace period of six months.
Singapore also published guidelines for Initial Coin Offerings in 2017 and is home to several merchants that accept BTC payments across the island.
As the decentralized web disrupts the global economy, nations that embrace digital assets and smart contracts early will cement their lead. Canada could establish itself as a clean-energy Bitcoin mining hub, while Malta and Singapore could secure their position as crypto development hubs. This should help boost entrepreneurship and innovation in these nations.
However, El Salvador’s adoption of BTC as legal tender is perhaps the biggest milestone this industry has ever achieved. It could change the way tax officials and accountants in other parts of the world treat BTC. It may also encourage other small, economically vulnerable nations to consider BTC a viable alternative to dollarization.