The discussion of states about cryptocurrencies is an important turning point in the history of the political economy. While this technology is interpreted as a threat by some states, some states prefer to be part of the adaptation. Of course, the actions taken by states considering Bitcoin and cryptocurrencies will have different results. In this article, the countries that are on the positive side in the state and Bitcoin dialogue will be examined. Here is the list of Bitcoin ‘friendly’ countries, respectively…
Switzerland
Located in Central Europe, Switzerland is a country that ranks first in economic productivity and has a high standard of living. Switzerland is not part of the Eurozone. Therefore, the country uses the local currency, the Swiss Franc (CHF), instead of the Euro.
The positive attitude of the country, Switzerland, towards cryptocurrencies and Bitcoin is embodied in the hospitable attitude it displays towards blockchain projects. For example; The non-profit Ethereum Foundation, which was established for the development of Ethereum, and Xapo, which provides Bitcoin digital wallet service, is headquartered in Switzerland.
It goes back to 2017 when the cantons of Zug and Lucerne, known as the “Valley of Cryptocurrency”, did detailed studies on Bitcoin taxation. Holding cryptocurrencies in Switzerland is considered wealth tax. The taxation of crypto assets is based on year-end average prices determined by the Swiss Federal Tax Administration.
Income from crypto is subject to income tax, even if the person is self-employed.
As of mid-February 2021, Swiss citizens residing in the canton of Zug can pay their taxes up to CHF 100,000 in Bitcoin.
Additionally, although each of the 26 cantons has different cryptocurrency regulations – Switzerland – deserves the top spot among Bitcoin-friendly countries.
Malta
Malta, known as a Southern European island country, is one of the countries with the highest population density with 450,000 citizens and a population of 316 km2. Malta is located in the Eurozone and uses the Euro (EUR) as its currency.
The country’s economic activities largely come from its geostrategic position. Being an island country and being an important transit point in the Mediterranean, it reflects positively on port trade.
Malta is a country known as the legal center of some of the leading cryptocurrency exchanges. Of course, the flexible tax system in Malta has a great impact on this. In line with this, in 2018, the Maltese Minister of Economy requested that Malta be referred to as the “Blockchain Island”.
Meanwhile, the Crypto.com exchange received an EMI (Electronic Money Institution) license from Malta in July 2021.
Japan
Japan is the third country in the world in terms of GDP (Gross Domestic Product). In other words, it is the third country with the highest money flow in the world.
Bitcoin was first adopted as a legal currency by El Salvador. However, we can say that Japan is a leading country in this regard. Japan is one of the countries that implement the most comprehensive cryptocurrency regulation. In this regulation, more than thirty cryptocurrency exchanges were scrutinized and it was aimed to increase security.
In terms of taxation, crypto-asset investors are not taxed, only those who make trades.
In the first quarter of 2016, the Japanese government-defined Bitcoin as “real money”.
El Salvador
The Miami 2021 Bitcoin Conference witnessed a historic time with the announcement of Nayib Bukele, the president of El Salvador. For the first time, a country in the world has categorized Bitcoin as a legal currency.
Although the IMF stated that El Salvador’s move could have negative consequences, a domino effect began in the region. Similar statements were made from other Latin American countries, particularly Paraguay, Argentina, and Ecuador.
Bukele announced that people who own 5 BTC can obtain citizenship from El Salvador. We also witnessed the first time a country will airdrop Bitcoin. Bukele will give away $30 worth of Bitcoin to all adult El Salvador citizens.
Singapore
Singapore is an island country located in Southeast Asia. It is economically highly developed with a population of 5.6 million people. As in the case of Malta, Singapore also derives its economic return from port trade.
Singapore ranks third in the world in GDP per capita. In addition, Singapore was chosen as the most technology ready country. In parallel, it is one of the countries with the lowest corruption rate.
Under Singaporean law, Bitcoin is considered a commodity. Therefore, it is included in the goods and services tax. Firms that are Bitcoin investors must pay the 7% goods and services tax. Additionally, long-term investors are not taxed for holding Bitcoin.
According to the Singapore law in force as of January 2020, obligations and rights have been defined specifically for digital payment tokens. With this law, it is aimed not only to prevent money laundering but also to prevent terrorist activities.
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