Which Countries Are Crypto-Friendly and Which Are Not?

Which Countries Are Crypto-Friendly and Which Are Not?

10 minutes to read | 07.16.2022
TL;DR Portugal, Switzerland, Germany, and Singapore are some of the most crypto-friendly countries due to their lax tax laws and positive attitude towards crypto. El Salvador made Bitcoin a legal currency, and doesn't tax foreign investors on any Bitcoin investments. India is one of the worst because of the high taxes, surcharges, and transfer fees on any trades. However, cryptocurrency is outright banned in the countries of China, Russia, Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, and Bangladesh.
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You can have an advantage as a crypto user just depending on where you live. The opposite is also true. If you are unlucky to be born in a certain country, you may have a hard time with crypto, or may not be able to use it at all. We are going to look at a few different things to see if a country is crypto friendly or not. These things are if the country has embraced crypto (they allow citizens to trade crypto), the amount of taxes, if mining is available, the exchanges available, and if you can buy and sell with the country's currency. Is your country on the list?

Cryptocurrency-Friendly Countries

First, we are going to take a look at some of the best countries for cryptocurrency.
Portugal Flag Crypto

Portugal

Portugal is one of the best countries for crypto users. When it comes to taxing crypto, there is no better place than Portugal. Since there is no capital gains tax on crypto, residents here are able to buy and sell cryptocurrency without having to worry about the government dipping into their profits. Not only is there no capital gains tax on crypto, there is no income tax on crypto either. Would you take your paycheck in Bitcoin? However, if you are a company in Portugal that provides services related to cryptocurrency, then you are still subject to capital gains tax. That means your profits are taxes anywhere from 28% to 35%. In Portugal, Congress has been rejecting bills that would tax cryptocurrency, but this may be coming to a change very soon. The Portuguese Minister of Finance claims that in the future crypto would be taxed, but there has been nothing official about how or when it will be taxed. Taxes could easily change for the crypto-friendly country with the swipe of a pen. Portugal allows cryptocurrency mining, which is good for Bitcoin miners. Miners here enjoy less regulations than other countries, and when you combine that with not having taxes on the crypto you mine, it’s hard to find a better place to mine cryptocurrency. A downside is that crypto mining uses a lot of energy and electricity is expensive in Portugal, which has the 5th highest energy costs in the EU, 23rd in the world. There are many cryptocurrency exchanges available in Portugal. The main exchanges available are Coinbase, Binance, Crypto.com, eToro, Kraken, and FTX. Each of these exchanges allows you to buy and sell in Euros, Portugal’s official currency. There are a lot of benefits for crypto users in Portugal.
El Salvador Flag Crypto

El Salvador

El Salvador is a country that you might have heard a lot about in the crypto world. That’s because it’s looking to be a leading country in crypto, hoping to attract more investment to stimulate their economy. Bitcoin is legal tender in El Salvador, which means you can go out and spend Bitcoin for goods and services. The country adopted Bitcoin as legal tender on September 7, 2021. They even have their own official wallet called Chivo, which allows people to make payments to businesses in Bitcoin right from the app. El Savador wants to create a Bitcoin City that will not have any income, property, or capital gains tax. Citizens and foreign investors are also exempt from capital gains tax on any Bitcoin investments in the country. Bitcoin City will be built next to the Conchagua volcano on the Gulf of Fonseca, and will be funded with Bitcoin bonds. It looks incredible, so let’s see if the country can pull it off. Exchanges available in El Salvador are Binance, Kraken, and FTX. These exchanges deal in both Bitcoin and United States Dollars, which are both legal currencies in El Salvador El Savador does hold Bitcoin (about 2,301 as of July 2022), and actually is mining Bitcoin using a volcano as energy.
Singapore Flag Crypto

Singapore

Singapore has become a haven for crypto users and businesses. In fact, a few major crypto exchanges are based here like Crypto.com and KuKoin. This is because it’s one of the easiest countries to set up a cryptocurrency business in all of Southeast Asia, gets major foreign investment, has a highly developed, business-friendly economy, and is known to have a favorable taxation system. As an individual buying and selling crypto, there is no capital gains tax, so you can make as many transactions and investments as you’d like. Even short term investments have no tax. This is because in Singapore, cryptocurrency is seen as bartering instead of as a currency. However, if you are a cryptocurrency business or a business accepting crypto as a payment then you are subject to a corporate tax of 17%. If you are a Bitcoin miner then you are able to mine as much as you want without having to deal with any regulations. This goes for staking, too. Electricity in Singapore is not expensive, making it a great place to start a crypto mining business. Most major crypto exchanges are available in Singapore including Gemini, Coinbase, Kraken, Crypto.com, Binance, and Capital.
Switzerland Flag Crypto

Switzerland

Switzerland is known for its banks, and it is also known to be a great country for cryptocurrency. Switzerland was the first country for their banks to allow crypto businesses to open accounts. Not only was this great for banks, and businesses, but it also helped propel crypto’s legitimacy around the world. On top of that, it helped reduce fraud, like money laundering. In Switzerland, you pay taxes on the crypto that you have mined and short term holds. You are also subject to a wealth tax based on your total net worth. However, average individuals trading and investing in crypto will not be subject to capital gains taxes in Switzerland. Switzerland might not be the best country on Earth when it comes to mining cryptocurrency. One, you do have to pay taxes on what you mine, and two, energy costs are some of the most expensive in the world. The two negatives do eat away at any profits you would receive through mining rewards. Switzerland offers many cryptocurrency exchanges that do trade in the Euro. These include Coinbase, eToro, Binance, Kraken, FTX, BitPanda, and Uphold. Plus the country is just gorgeous.
Germany Flag Crypto

Germany

Germany is one of the EU’s, and the world’s, leaders when it comes to cryptocurrency. About half of the people living in Germany are investing in crypto. Germany is almost tax free when it comes to crypto. If you hold your crypto for less than a year, and make more than $600, the profits will be subject to capital gains tax. So while long term crypto investments and small profits are safe from taxes, getting paid in crypto, mining, staking, or short term holdings are not. By encouraging its citizens to invest in Bitcoin and other cryptocurrencies for the long term, this shows that Germany sees crypto in the future. When it comes to mining cryptocurrency, it will be taxed as income tax. The same rule applies to any crypto that you have staked unless you have held it for 10 years. Think of all the crypto you will have earned after 10 years. Germany might accidentally make a bunch of people rich from staked crypto. However mining cryptocurrency in Germany is already costly enough since they rank 4th in the world for energy costs. Between taxes and energy costs, profits from mining will be eaten away at. It’s probably better to set up a mining company somewhere else. Like most other countries of the EU, Germany has access to all the major crypto exchanges including Crypto.com, Binance, Kraken, Coinbase, and eToro. Of course, these exchanges allow you to sell in Euros.

Not So Crypto-Friendly Countries

Here are some countries where crypto is seen as the bad guy.
China Flag Crypto

China

A long while ago China was a leader in the crypto industry. This is because early on in Bitcoin’s life most of the miners were based in China. In fact, in 2021, 65% of Bitcoin miners came out of China. Later in 2021, the miners disappeared from China. China fully cracked down on any crypto mining and told major banks not to do business with any cryptocurrency companies. Some crypto-related companies even got their business registrations canceled. Then, even later in 2021, China fully banned cryptocurrency. Well, if all the Bitcoin prophecies are going to come true, then that’s not a smart move on behalf of the citizens. The reasons that China gave to ban cryptocurrency were concerns for the environment and preventing money laundering. But not all digital currencies are banned in China. They have created their own digital yuan currency.
Russia Flag Crypto

Russia

In Russia, cryptocurrency is currently not able to be traded. There have been fears in 2022 that Russia will attempt to fully ban cryptocurrency in the country. The reasons they want to ban crypto is due to possible money laundering or the fear that it will be used to fund terrorism. That’s because Ukraine, a country that Russia invaded, received somewhere around $100 million worth of crypto assets, and sold some, probably to buy weapons to aid their war efforts. Despite the restrictions, data shows that Russian citizens hold around $200 million worth of crypto. Reports also show that recently Russia decided against a full ban of crypto, and instead will opt to regulate it heavily. They have even decided to create their own digital currency, which is most likely going to be used to bypass the sanctions that half the world has placed on them at the moment. However, even more recently (July 2022) the leader of Russia signed a law banning Bitcoin and other cryptocurrencies as means of payment in the country. Russia is also well known for cybercrimes like hacking and digital money laundering. In 2021, they were responsible for 75% of digital money hacks.
India Flag Crypto

India

About 7% of India’s population hold cryptocurrency. That’s over 100 million people! India has been in a tough fight for cryptocurrency rights. Like the other countries listed, India believes that crypto will only be used for money laundering, fraud and terror financing. However, it is not fully banned… yet. In 2018, India did ban cryptocurrency from being traded, as well as banned banks not to allow customers to exchange digital currency. A few years later, in 2020, India’s Supreme Court ruled against it, and overturned the ban. Coinbase, a major crypto exchange, is suspended from operations in the country due to the government claiming it was unaware that the exchange was using the country’s popular payment system. Cryptocurrency mining is also not banned in India for the moment, nor are there any regulations on it either. If you have the means to mine Bitcoin, you are free to do so. However, the country’s infrastructure is limited. To mine crypto successfully you need a 24/7 internet connection and 24 hours of electricity, which may not be possible for many in the country. India has a 30 percent taxes on crypto holdings under their Income Tax Act. Profits are also subject to surcharge and transfer fees, plus an additional 1% tax deducted at source, which is per transaction. That means you are subject to this tax any time you buy, sell, or transfer crypto, including NFTs.

Countries Where Crypto is Banned

Even though these countries have tight regulations or a large tax on crypto, Bitcoin and other cryptocurrencies are currently fully banned in the countries of Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, and Bangladesh. Summary When it comes to crypto not all countries are equal. Some are better than others in terms of taxes, exchanges available, mining opportunities, and trading in general. Some of the best countries for cryptocurrency are Portugal, Germany, Singapore, El Salvador, and Switzerland. Countries that are not so crypto friendly are China, Russia, India, and a few others who have outright banned crypto from being used. Now that you know which countries are the best for crypto and which are the worst, you can learn about the best and worst cryptocurrencies for the environment.
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