Which countries are tolerant of cryptocurrencies?

There are several metrics that can be used to determine whether a country is tolerant of cryptocurrencies. The most widely used judging criterion is how tightly a country regulates and imposes taxes on cryptocurrencies.

But aside from this, there are many other signs the country could show signs of being a “virtual-positive” place.

First, countries with a large number of cryptocurrency investors and traders are “virtual currency-positive” places. Second, it also means relatively supportive countries that allow bitcoin mining and take steps to attract investment in the sector. Third, it is another positive development if a country’s banks have a generous policy of transferring funds to cryptocurrency exchanges and other decentralized platforms. This is a good sign for widespread cryptocurrency adoption, especially since fees are involved and getting funds from bank accounts into these cryptocurrency investment channels is a huge bottleneck. So when it comes to whether a country is crypto-friendly or not, it’s a matter of de facto point of view and what side it’s looking at.

Now let’s talk about some of the most “crypto tolerant” countries.

Portugal

Portugal is said to be taking a “soft stance on cryptocurrencies”. People who profit from buying and selling cryptocurrencies do not appear to be taxed on capital gains. Not only that, but exchanging one cryptocurrency for another is duty-free. However, these benefits appear to apply only to individuals and not to businesses. In other words, Portugal is a cryptocurrency paradise for individuals, not businesses.

Germany

Germany predicts that “virtual currencies are not considered nationally legal, so they are considered personal assets.” Besides, German law is designed to favor long-term investments. This means that anyone who holds the investment will not be subject to capital gains tax, whereas anyone who sells (within one year) will be subject to capital gains tax.

Malta

The small country of Malta has long been talked about as a center for cryptocurrencies and blockchain. The Maltese government is backing cryptocurrencies and has so far established rather loose regulations. However, people are concerned because there seems to be insufficient regulatory oversight.

Swiss

Switzerland jumped into the crypto game early.

Many cryptocurrency and blockchain companies such as Ethereum, Shapeshift, Xapo, and Bity are operating in Korea. Switzerland’s largest city, Zug, is known as the “Crypto Valley”. The very existence of this name is important. In terms of regulation and tax, some are strict and some are less stringent, so it depends on the region. Moreover, on the positive side, it appears that individuals can make purchases and pay bills with virtual currency.

Slovenian

Slovenia is home to the world’s first Bitcoin-friendly shopping center called “Bitcoin City”. This shopping center has about 500 stores that accept Bitcoin.

It is also said that income from virtual currency is not taxed on individuals.

Singapore

Singapore has long been an “Asian tiger” economic powerhouse and a stable financial center. It is also an innovative hub for companies operating in the tech and fintech industries. Trading with cryptocurrency exchanges is legal, and city-states are more tolerant of this issue than their local neighbours.

USA

A recent study by research firm Crypto Head ranks the US as the most “crypto ready” country in the world. Although this does not directly translate as “a country that is tolerant of cryptocurrencies”, it is still important to consider. In addition to this, federal and state governments are paying a lot of attention and attention to cryptocurrencies. Nevertheless, very little rulemaking has been done. Individual states such as Wyoming, Colorado, Oklahoma, Nebraska, South Carolina, Arizona and New York are moving to review and deregulate cryptocurrencies. At the federal level, the SEC, FinCEN and Treasury Secretary Yellen are reviewing cryptocurrencies and stablecoins, but it is still unclear how. Of course, the industry is likely to become more stringent as the AML, CFT, and taxation landscape evolves.

However, in terms of overall bans and regulations on virtual currency purchases and transactions, the United States is not moving in this direction, but rather is trying to maintain its role as the largest cryptocurrency market.

Honorable Mention: Cyprus, Bermuda, Nigeria, United Kingdom, Israel

Which country is the best for Cryptocurrency holders?

Although it is not an exhaustive list of crypto-tolerant countries and a complete analysis of each country’s policies and attitudes, this is just the beginning. Because definitions vary, it is difficult to give a definitive assessment of which countries are tolerant of cryptocurrencies and why.

There are many more countries that have a positive attitude towards cryptocurrencies, not just the ones mentioned above. However, the basic theme common to all of the above countries is that there are no excessive taxes and regulations, and individuals are very free to purchase these assets. Will these countries continue to be tolerant of cryptocurrencies? Or will we put up tighter barriers against cryptocurrencies? It’s hard to say at the moment.

What is fiat currency?

Fiat currency is a fiat currency issued, regulated and controlled by the government.

The value of this money has nothing to do with any physical commodity, whether in the form of paper bills or coins.

Instead, it is determined by the demand for fiat money and the stability of the government that supports it.

The most dominant (and most influential) currencies are the US Dollar, Euro, Japanese Yen and British Pound Sterling.

However, this was not the case from the beginning, and money progressed through several stages before it took its present form.

The desire for money essentially stemmed from the need to have things.

Once the human realized that he couldn’t hunt/collect everything he needed, he started trading or bartering.

And soon, they realized that different items or services had different values.

A barter or trade was made only if both parties had the desired item (of the same value).

Commodity currency

Commodity currencies, or things used as money, arose.

It is based on the idea that a product has some level of intrinsic value to everyone.

Various commodities were used as money according to where each country and each region of the world was located.

In colder regions fur and fur were the standard of currency, while in warmer regions fur and fur were less valuable than food and other minerals.

There was no exact criterion for money, and values ​​tended to largely follow the necessity and practicality of a particular commodity.

Disadvantages of commodity money

One of the biggest problems with commodities is maintaining the value of commodities over the long term.

For example, if a merchant who has a lot of valuables receives a lot of barley from the other party at the time of the transaction, if the barley goes bad or the quality changes before using it, the value will decrease even in a relatively short period of time.

These characteristics of commodities made it virtually impossible to store wealth.

Even if barley has a longer shelf life, these changes are likely to lose its value as a currency anyway.

Of course, not all commodities are perishable.

Precious metals are the most well-known and durable commodity currencies, with some developing countries still using gold and silver to support their currencies to this day. The problem of using money using metal is inconvenient to carry bulky and heavy materials. Instead, banks started using paper currency to represent a certain amount of gold that was officially held in their accounts, which gave birth to money.

Representative currency

A representative currency is government-issued banknotes, which are issued based on real commodities such as gold and silver.

One important difference between fiat money and fiat money is that the government can only print money based on the actual amount of gold in the vault. Strictly speaking, the representative currencies could each issue a proportionate amount of gold to the amount of money they could mint, and this gold standard soon became accepted worldwide. Each country had a different currency whose value was determined by its gold reserves and the price of the metal.

+ (So in the past, gold was printed on the front of the dollar)

Fiat currency as we know it

In 1971, (USA) President Richard Nixon made privately owned gold hoarding illegal.

This ended the gold standard by switching from the flagship currency to the final currency.

Going back to the beginning of this article, it can be recalled that paper money has no intrinsic value other than the value it has been assigned by the government. In other words, fiat currencies are not commodities, their value is guaranteed by the government.

If the government issued this currency as a reliable payment method, most people would accept it as such. The downside of fiat currencies is that inflation occurs through poor money management or through issuances that greatly exceed the threshold. For example, in the case of Venezuela, hyperinflation occurred, and in order to maintain the value of money, the country’s currency, the Bolivar (Venezuelan legal currency), had to be immediately exchanged for dollars.

And the newest Cryptocurrency

The next step in the evolution of money is cryptocurrency.

Bitcoin is the first widely known decentralized cryptocurrency, and has since spawned numerous altcoins and projects.

Interestingly, Bitcoin can be considered a fiat currency because it is not backed by any commodity and merely derives some value from investors’ trust and government. This opinion is still under debate.