Cryptocurrency is becoming more popular nowadays and it allows safe and decentralized global trading. However the legality of cryptocurrency is in doubt in some countries. Many countries have passed legislation on cryptocurrency. This article helps you to identify the top 10 countries where cryptocurrency is legal.
Why is the Legal Status of Cryptocurrencies Important?
The general impression about cryptocurrencies describe them as effective tools for conducting anonymous transactions among users worldwide. However, the anonymity related to using cryptocurrencies encourages the frequency of fraudulent activities. Most importantly, the lack of regulatory control on cryptocurrencies and illegal uses of cryptocurrencies create doubts regarding their trustworthiness. Can you trust an unstructured cryptocurrency? Not, unless you are prepared for the thrust of risks related with using cryptocurrencies.
Top Countries Where Cryptocurrencies are Legal
1. El Salvador
El Salvador is the first country to accept Bitcoin cryptocurrency as legal tender. The Bitcoin payments accepted in all businesses by the Central American Nation. El Salvador became inspiration for many other countries to move forward in crypto adoption. On the other hand El Salvador imposes certain restrictions on cryptocurrency, in order to achieve the aim of large transformation for its digital economy. Recently it introduced taxes on income and profit gains for foreign investors.
2. Slovenia
The 2nd country who accepted cryptocurrency as legal is Slovenia. Slovenia is a small country in Central Europe that has been gathering crypto’s community attention. Slovenia does not impose any VAT (Value Added Tax) on mining and trading cryptocurrency. The Slovenia government appreciates the active transformation to blockchain technology in different areas. Most importantly, Slovenia has a high success rate in blockchain based start-ups.The relaxation of crypto regulations serves as a welcome sign for many crypto investors and companies worldwide.
3. Germany
Germany is ranked as the 3rd country to allow cryptocurrency as legal money. It considered crypto as private money, on the other hand many other countries adopted it as a digital asset. Long term investors are welcomed in Germany for a freedom for long term capital gains tax. That’s why people hold crypto for over a year to receive maximum capital gains taxes. Germany typically supports cryptocurrencies. It does so in its tax policies. Berlin has also become a hub for many popular blockchain companies. For example, EOS and cryptocurrency IOTA are based there. It was also among the first cities to accept crypto.
4. Canada
Canada is the most popular country in technology developments and has become a global leader in development of blockchain and cryptocurrencies. Canada follows an open approach to crypto regulation without restrictions on using cryptocurrency. Canada distributes crypto companies as money service businesses (MSB). Canada has many BTC ATMs. It is one of the highest numbers in the world. They show the country’s move to virtual currencies. Also, several Canadian banks allow crypto transactions. This makes life much easier for investors and businesses alike.
5. Malta
Malta has been using cryptocurrency for a long time. Binance moved back from Japan to Malta because they thought Malta was more beneficial. Malta is also claimed as one of the crypto friendly countries. Now cryptocurrency is being used in Malta for trading purposes and authorities also passed the bill on cryptocurrency. Paytah, Agribank, Founders Bank are the crypto friendly banks in Malta. In Malta investors won’t have to pay capital gains tax but have to pay income tax. The government passed bills to make the country more attractive for crypto businesses.
6. The Netherlands
The Netherlands government thinks that the cryptocurrency potentially helps to improve the country’s economy. The Netherlands also don’t have strict regulations of cryptocurrency. People can use the cryptocurrency without hesitation, unless they follow community standards by the Financial Action Task Force (FATF). That makes it a crypto friendly In the Netherlands cryptocurrency is regulated by the Dutch National Bank (DNB).country.
7. Singapore
Singapore has a strong regulatory framework that welcomes cryptocurrency and blockchain technology. Singapore has no capital gains tax. Singapore is a biggest global fintech hotspot and provides many opportunities for crypto and blockchain investors. You don’t have to fulfill crypto tax obligations forms for trading profits. The Singapore central bank has positive thoughts about cryptocurrency. It says the blockchain ecosystem monitors closely. It does this to stop illegal activity.
8. Estonia
Estonia is ranked 8th in promoting cryptocurrency and very easy crypto regulations. Estonia fast tracked to introducing its own cryptocurrency named Estcoin. Financial service supports the use of cryptocurrency. LHV bank was the first bank that adopted cryptocurrency in Estonia. It also released a Cyber Wallet App that is based on blockchain technology for crypto individuals and corporations to send and receive digital currency. Estonia has no corporate income tax. But, only if the profit is not dispersed. Estonia intends to revolutionize its economy by attracting tech companies from all over the world.
9. Switzerland
Switzerland has a low tax and high privacy banking system worldwide. Switzerland also has a strategic approach to embracing crypto and relaxed regulations. It also adopted bitcoin as legal tender. Furthermore, it has an exclusive crypto mining industry which helps for many crypto start-ups. The Swiss bank was the first in the world to offer cryptocurrency business accounts. Switzerland also classified crypto as an asset. If you hold and trade crypto in your own account and qualify for individual trading there will be no capital gains tax. Zug, Switzerland is known as the “Crypto Valley.” It’s a hub for blockchain startups, shops, and entrepreneurs. Additionally, the region offers tax benefits to crypto investors. In 2016, Zug became the first place in the world to accept Bitcoin payments. This makes Switzerland an ideal country for crypto activities.
10. Portugal
The final addition Portugal has the best crypto tax haven in the world right now. The country has no capital gains tax on trading, sending and receiving as long as you are a professional trader. Portugal also has positive sentiments about cryptocurrency and blockchain technology. Cryptocurrency is tax-free in the country. Many crypto traders have already made Portugal their second home.The government said the plan will spur business innovation and digital change. It will create “Technological Free Zones” for blockchain and other tests. Hence, Portugal leads in supporting cryptocurrencies.
Are There Any Regulations on Crypto?
Countries are still researching and developing cryptocurrency regulations. Some are creating laws, while others are falling behind for different reasons.
What Year Will Crypto Be Regulated?
Some countries have partial regulations, while others aim for full control. For example, the U.S. regulates crypto exchanges. Meanwhile, the EU has laws for crypto service providers.
Who Is the Crypto Regulator?
In the U.S., the regulation of crypto depends on its use and location. Entities like the Securities and Exchange Commission, the Chicago Mercantile Exchange, the Commodity Futures Trading Commission, and the Financial Industry Regulatory Authority are involved. However, transactions among private users, such as private wallet to wallet, are unregulated.
The Bottom Line
Cryptocurrency emerged in 2009. Now, governments and regulators are figuring out how to control it. They aim to shield consumers and businesses from fraud. Also, they’re working to stop illegal crypto activities. Progress is happening, but slowly and amid controversy.
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