It's no longer a surprise that traders think cryptocurrencies will change the way money works. This is because crypto gives investors the freedom that they don't have with traditional banking. Digital assets have many potentials, like buying real estate and luxury goods. Even so, it still fits into two rating groups.
The first group is made up of people who see the good things about assets, while the second group sees the bad things. Even though we have it for people, we also have it for countries. Some countries have taken on the assets, but others still don't like them. In this article, we'll look at some countries around the world that are the most friendly to crypto.
List of countries that support crypto
When it comes to digital assets, a country's friendliness is measured by two things. The first is how tax-friendly the government is to traders, and the second is how crypto is regulated. Even though some countries are very strict about the two things above, the countries listed below are very crypto-friendly.
Portugal's government is not as strict about crypto investments as it is about other investments. People say that the country's law on crypto is one of the most friendly in the world. For example, crypto traders across the country do not have to pay capital gains tax. Moreover, there are no taxes when you trade one crypto for another.
People who get their payments also don't have to pay income tax. But companies that trade in cryptocurrency would have to pay the usual capital gains tax. Due to the way taxes are handled, Portugal is a great place for crypto traders to go. Aside from that, Portugal also has some programs that make it easier for crypto investors to do business there.
The banking sector in Switzerland is known for its high level of honesty and low level of risk. Furthermore, it shouldn't be a surprise that the country is one of the few places that support cryptocurrencies. But Switzerland's regional system is what decides how a certain sector is regulated. This is because people in the country's 26 regions have different ideas about digital assets.
One place could decide that Bitcoin traders should have to pay taxes, while another could make it tax-free. Zurich is used as a case study because there is no tax on liquid private wealth in that area. This means that digital assets like Bitcoin and others are not taxed. But miners have to pay taxes on the money they make from their operations. Notably, this is true in most parts of the country. Only a few are very strict about crypto.
#3 El Salvador
This Central American country is one of the first countries in the world to accept Bitcoin as legal currency. This means that every business in the country has to accept BTC as payment. Several other countries have been influenced by this to start accepting crypto as legal currency, but it has its limits.
El Salvador wants to change its digital economy as well by bringing in crypto businesses and investors. Foreign investors don't have to pay income or capital gains taxes on cryptocurrency. So, if you aim to avoid paying taxes on cryptocurrency, El Salvador might be the place for you.
President Nayib Bukele, who is pro-crypto, wants to help the small Central American country move forward in this area. Since BTC is now a legal currency, more than 4 million people in the country use it, which is about 60% of the total population. In the future, there are also plans to build a “crypto city,” but these plans are still in the early planning stages.
Singapore is one of the safest places in the world, and it is the best place for businesses to grow. People also say that Singapore has one of the largest FinTech companies in Asia. Singapore's Monetary Authority says it wants to look into digital assets and help them grow. Many analysts think that this makes the country one of the fairest when it comes to how it regulates crypto.
Singapore does not charge people or businesses with assets a tax on their capital gains. Simultaneously, companies that use cryptocurrency for payments or trades will have to pay income tax. The government also considers Bitcoin to be intellectual property rather than legal currency. They think that bartering could be a way to pay for goods with cryptocurrency trading. Taxes are paid on goods and services that aren't paid for with cryptocurrency.
Slovenia is one of the most crypto-friendly countries in the world. This is because its government has given the green light for blockchain technology to be used in the country. Also, there are tax breaks for trading crypto and no value-added tax on mining. This makes it a safe place for crypto traders.
Even though ICOs are taxed, the small Alpine country has the most market capitalization of blockchain projects per person. Also, people who live in Slovenia and pay taxes must pay a 25% income tax on mining, but there is no capital gains tax.
In 2022, the capital city of the country, Ljubljana, was named the most crypto-friendly place to live. At least 10% of the people in the city are avid users of cryptocurrencies.
Panama is known as a tax haven, and now some lawmakers want to make it a cryptocurrency haven as well. In April 2022, the National Assembly of Panama passed a law that regulates how cryptocurrencies can be used in the country. The bill lets people, banks, and legal entities use Bitcoin and eight other cryptocurrencies as a way to pay for things in both private and business settings.
The bill has been passed by the National Assembly, but it won't become law until President Laurentino Cortizo signs it. That has yet to happen. However, Panama isn't making it mandatory to accept crypto as El Salvador has. This means that crypto isn't recognized as a legal currency in Panama. However, this may change down the road.
Bermuda's crypto business is regulated by the Digital Asset Business Act, which was passed in 2018. There are no taxes on buying and selling, accepting payments in crypto, and a few other things. Because of this, it is one of the most crypto-friendly countries. It also brings in numerous traders and businesses.
Exchange-traded funds, which are a part of the market, are a great example. After failed attempts to start multiple ETFs in the US in 2020, Bermuda approved the first one to be started in the country. The start of the Hashdex Nasdaq Crypto ETF shows that Bermuda is just as crypto-friendly as other places.
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