This study explores and discusses the top crypto friendly countries with regard to adoption ease of business and how they are helping in the growth of the crypto industry.
The money of the future, cryptocurrency, is an internet-based digital currency that serves as a medium of exchange. It uses strong cryptography that enables secure and transparent transactions. Cryptocurrency implies blockchain that provides decentralization, immutability, and transparency. The most attractive feature of cryptocurrencies is that you can make transactions without involving third parties i-e banks. The processing fee is minimal, and transactions are highly secure between two parties via private or public keys. There was a quest for digital currency from the 90s, and DigiCash was a result of that hunt. But it failed due to various factors such as security and intermediaries. In 2009, a group of people called Satoshi Nakamoto brought cryptocurrency to the market, which spread like a fire. Follow this study to find more about crypto friendly jurisdictions.
Cryptocurrencies adoption rate is increasing at a rapid pace. Blockchain.com, a widely used wallet by Bitcoin users, has seen a new user growth of more than 500% in the last 4 years while the transaction growth on their platform is 260% during the same period. No one will ever know the exact crypto users but according to research, there are 100 million people that own $1 or more in crypto. A study by Deutsche Bank compared the adoption rate of cryptocurrencies with the internet adoption rate and expected cryptocurrencies growth to be more or less equal to the internet users’ growth in the coming years.
Crypto friendly jurisdictions
The fast growth rate of cryptocurrencies is not by chance but due to various countries by supporting not only its use but also providing opportunities for ease of business for this industry. Some countries have stifled growth in the crypto industry such as China and Japan but most of the governments around the world are still thinking about cryptocurrencies adoption. Fortunately, there are countries and jurisdictions which have considered it’s worth and welcoming it with open arms. They have created a favorable environment and framework to increase its adoption. Following is the list of crypto-friendly jurisdictions.
Japan is the leading blockchain hub in the world, with its government working for cryptocurrency’s growth and adoption. The economy of Japan is highly developed, considered as the world’s second-largest economy. Its GDP is the third-largest in the world, and it is a member of G7 and Group of Twenty. In 2018, Japan, together with China and South Korea, featured 120 companies in the Fortune 500.
Many reasons make Japan included in the top crypto jurisdictions, such as the first major Bitcoin exchange platform started in Tokyo, and Bitcoin is considered legal in Japan. 10% of global crypto exchange platforms traffic is from Japan. Even Satoshi Nakamoto used a Japanese pseudonym. Japan was one of the first countries to recognize cryptocurrency for its legal system. Japanese YEN makes 40% of global trading Bitcoin volume that is second to the US dollar.
In 2017, a virtual currency act was passed to govern the capital requirement and security process. In 2018, Mitsubishi UFG Bank announced its own cryptocurrency exchange and coin. In 2018, Japan allowed 16 largest crypto exchanges of the world to build a self-regulatory body due to which many crypto startups are moving towards Japan. The Japanese Virtual Currency Exchange Association (JVCEA) comprises 20 organizations that have the power to pass and implement standards for cryptocurrency exchanges in Japan.
Hong Kong is a small territory with more than 7 million population and a healthy economy. Its economy was rated as freest since 1995 and now is considered as the second freest in the 2020 index. Its currency is called the Hong Kong dollar, and it is one of the world’s wealthiest countries.
The Hong Kong government has a close relationship with cryptocurrencies. According to the Hong Kong Monetary Authority, Bitcoin is categorized as a virtual commodity, same for other cryptocurrencies. Hong Kong banking laws don’t apply to virtual currencies; therefore, cryptocurrencies’ transactions are unhindered with no special regulations. In 2018, The Financial Services and Treasury agency of Hong Kong published a report on money laundering. It was concluded from the report that cryptocurrency had no impact on money laundering and terrorist financing etc.
The government of Hong Kong is friendlier for the cryptocurrency than the banking sector. The famous port city of Hong Kong has many 27/7 cash-to-BTC ATMs. Hong Kong is now working to explore regulations over cryptocurrencies, especially for Security Tokens. The government is giving licenses to the crypto-related companies without any restrictions and owners of cryptocurrencies are not subject to any restrictions and regulations; no need for the license. Several campaigns are working to create awareness and a better understanding of digital assets. The Hong Kong government is likely to be vigilant in promoting cryptocurrencies.
Switzerland is one of the world’s most advanced free economies, ranked third in 2020 according to the Global Competitiveness Report. It has a low unemployment rate, highly skilled people, and a very high standard of living. It’s per capita GDP is among the highest in the world. It has its own currency Swiss Franc CHF.
Switzerland has provided space to cryptocurrencies. Zug (Swiss town) is known as Crypto Valley, whose laws enabled Bitcoin as a payment source for utility bills. Administration costs and resident registration fee can be paid in bitcoin in Zug. Crypto Valley hosts the top 50 blockchain and cryptocurrency-related companies, worth $44 billion. The government of Switzerland is crypto-friendly in order to become a crypto-nation that should be known as a hub for crypto-related businesses.
In 2018, RT.com published an article that Switzerland is warmly welcoming cryptocurrencies and ICOs. In 2015, The Swiss Financial Market Supervisory Authority (FINMA) worked for carrying out the unrestricted crypto transaction by proposing equal status of cryptocurrency with other currencies in the country. Many industries in Switzerland accept cryptocurrencies for payments such as Swiss state railway accepting Bitcoin for ticket payment, and many Swiss banks like Falcon Private Bank allow transactions and deposit of selected cryptocurrencies.
In 2017 Swiss online bank Swissquote for a financial product permitted users to allocate holdings between USD and Bitcoin. Recently in June 2020, FINMA has allowed two banks named Maerki Baumann Bank and InCore Bank to offer cryptocurrencies trading and custody services. Maerki Baumann Bank subsequently announced its own crypto trading platform as well for their customers. The world’s first two crypto banks are also based in Switzerland named SEBA and Sygnum Bank.