As the usage of cryptocurrencies continues to unfold all over the world, quite a few international locations have established themselves as leaders in adoption.
COVID-19 has dominated 2020, and the consequences of the continuing pandemic have stifled many economies. Nevertheless, the cryptocurrency house has loved a yr of resurgence that has seen decentralized finance develop into a serious development, whereas Bitcoin (BTC) has finally surpassed its former all-time high of 2017.
It’s value noting that governments, policymakers and monetary regulators have develop into much more clued-in on cryptocurrencies and blockchain know-how over the previous two years. This has lent a hand to the continuing improvement of the house.
There are, nevertheless, a number of standout international locations that proceed to paved the way in creating environments that foster the event and use of cryptocurrencies. Let’s check out the highest 5 friendliest international locations to crypto and blockchain of 2020.
Switzerland (canton of Zug)
Zug, the small administrative space that has develop into often called the “Crypto Valley” of Switzerland, is definitely residing as much as that moniker. House to round 120,000 folks, the canton can also be thought to be a stronghold for companies on account of its standing as a tax haven, with one of many lowest tax rates in Switzerland. The world is a know-how hub, specializing in medical improvement and the manufacturing of digital elements.
The Swiss Group website additionally notes that wholesale commerce is one other main trade within the canton of Zug, with a heavy concentrate on commodities. Because of this, the realm has attracted huge companies, monetary service suppliers, in addition to IT, architectural and engineering companies.
Zug’s moniker because the “Crypto Valley” of Switzerland is primarily as a result of Crypto Valley Affiliation’s formal establishment within the area in 2017. The group has performed its half in driving the adoption of cryptocurrencies and blockchain know-how in Switzerland.
In September 2020, it was announced that residents of Zug would have the ability to pay taxes utilizing cryptocurrencies, beginning in February 2021. Firms and people will have the ability to pay as much as 100,000 Swiss francs ($111,258) of their tax legal responsibility in cryptocurrency, with native cryptocurrency alternate Bitcoin Suisse AG facilitating the alternate to fiat forex and its switch to the federal government.
On a macro stage, Switzerland’s parliament adopted important financial and corporate law reforms in September 2020 that integrated new authorized frameworks for the cryptocurrency and blockchain house.
The legal guidelines included pointers for the alternate of digital securities in addition to authorized processes for reclaiming digital belongings from firms that file for chapter. Authorized necessities for cryptocurrency exchanges have been additionally outlined — primarily specializing in introducing AML and KYC guidelines in an effort to scale back cash laundering utilizing cryptocurrencies.
Following that, the Swiss Federal Division of Finance started a public session on a proposed blanket ordinance that can take these legislative amendments into regulation on a federal stage. Numerous Swiss cantons, companies and events concerned within the blockchain house will probably be consulted up till February 2021. It’s envisaged that these amendments will then be enforced on a federal stage in August 2021.
All of this work in 2020 has laid a robust basis for the cryptocurrency and blockchain house to proceed to thrive in Switzerland for years to come back. In keeping with Swiss Info, there are over 900 blockchains and cryptocurrencies working in Switzerland, supporting round 4,700 jobs.
Singapore has established itself as a hub for cryptocurrency exchanges, companies and blockchain enterprises within the Asia–Pacific area.
In an in-depth article published within the Asia Occasions, Wirex communications supervisor Lottie Wells gives a complete breakdown of how the nation has approached the burgeoning sector, beginning with its proactive regulatory stance led by the Financial Authority of Singapore.
The regulatory physique’s Cost Companies Act came into effect in January 2020, which provides clear-cut guidelines and laws for cryptocurrency exchanges and repair suppliers to function within the nation. Wells described the act as an essential issue for the trade’s foothold within the nation:
“The regulation and corresponding licence gives a progressive framework that regulates funds techniques and digital fee token companies in Singapore, permitting sure cryptocurrency companies to proceed working within the nation.”
The MAS additionally launched its blockchain payments platform known as Project Ubin in July for business integration. The venture occurred over 5 years and explored and developed a blockchain-powered system for clearing and settlement of funds and securities. The MAS indicated that it’s going to proceed to make use of the prototype as a check community for future collaboration with different sovereign central banks in addition to the monetary trade.
Quite a few trade members in Singapore advised Cointelegraph earlier this yr that the completion of the venture and its availability for public use could play a role in the ongoing development of cross-border, interoperable blockchain techniques.
Knowledge additionally backs up the assertion that Singapore is turning into an more and more engaging house for blockchain and fintech firms. In keeping with the FinTech Times Blockchain Map, 234 blockchain firms are now operating in the country, having added 91 newcomers in 2020.
Singapore additionally performs host to quite a few main occasions and conferences together with, Singapore Blockchain Week and the Singapore FinTech Pageant. The latter attracts main members from the world of finance, IT and banking — and a few of the world’s brightest minds within the blockchain and crypto house.
Final however not least, Singapore is one among a handful of nations that has zero capital features tax on cryptocurrency revenue. All of this makes Singapore a crypto-friendly nation that’s attracting high companies to a location that has lengthy been often called a monetary and financial heart of the Asia–Pacific area.
Harkening again to the times of the now-defunct Mt. Gox alternate, Japan has been house to a wholesome cryptocurrency buying and selling group. This seemingly spurred on Japan’s Monetary Companies Company, or FSA, to draw up laws that have been supposed to supply stability and safety for merchants within the nation, whereas snuffing out unlawful operators and nefarious actors. Using cryptocurrencies as a method of fee is authorized, though “crypto belongings” are usually not thought of authorized tender.
Because of this, Japan has enforced sturdy regulatory parameters for the cryptocurrency trade, which the vast majority of exchanges and different crypto-related firms have welcomed. The most recent of those laws came into effect in April 2020, which require cryptocurrency exchanges to acquire licenses to function within the nation. Some main hacks have additionally led to the creation of policies that require exchanges to guard their clients’ cryptocurrency holdings in chilly wallets.
These amendments to the Cost Companies Act and the Monetary Devices and Alternate Act have been largely welcomed by quite a few exchanges that have been contacted by Cointelegraph Japan. There was an over-arching perception that clear-cut guidelines and laws would profit the house and doubtlessly drive institutional funding into cryptocurrencies.
Quite a few the nation’s greatest cryptocurrency exchanges additionally fashioned a self-regulatory physique known as the Japan Virtual and Crypto Assets Exchange Association, which basically sees the trade governing itself. In keeping with the group, 24 exchanges are at present licensed in Japan.
The Japanese FSA additionally launched its world Blockchain Governance Initiative Community in March 2020, which is geared toward driving improvement of the blockchain sector by open-source info sharing amongst all kinds of stakeholders within the house.
With a extremely regulated however crypto-friendly surroundings, Japan now has 430 crypto and blockchain-related firms working within the nation, which was a reported 30% increase from the quantity of firms registered in 2019.
South Korea is one other Asian nation that has developed a thriving cryptocurrency group. Its merchants’ urge for food for Bitcoin in years previous that has led to the well-known “kimchi premium,” however this has since waned after the nation started imposing strict regulatory measures on the cryptocurrency house.
The South Korean Nationwide Meeting handed new laws in March 2020 that finalized the framework for the regulation and legalization of cryptocurrencies and exchanges. Whereas the brand new regulation will solely have been absolutely applied by March 2021, blockchain and cryptocurrency firms can have a six-month interval to fulfill the stipulations set out within the new laws.
Cryptocurrency exchanges, funds, pockets service suppliers, firms conducting preliminary coin choices and different trade members might want to meet some pretty strict monetary reporting necessities. This consists of the necessary use of actual title financial institution accounts, imposing AML/KYC necessities for purchasers, and the usage of licensed info safety administration techniques.
The results of these preliminary laws has ended up making a progressive perspective to advertise the event and utilization of blockchain know-how and cryptocurrency within the nation. In August 2020, the workplace of the president released an announcement on its efforts to fight the continuing financial results of the COVID-19 pandemic. A part of its scheme to reinvigorate its native economic system is to foster blockchain know-how and the usage of cryptocurrencies — with plans to invest over $48.2 billion in blockchain and different Trade 4.zero applied sciences by 2025.
The nation additionally instituted particular regulation-free zones in varied cities throughout the nation in 2019, with Busan becoming a blockchain sandbox for the country. This laid the muse for some bold plans this yr, together with giving residents entry to authorities companies utilizing a blockchain-based identification app. Town additionally rolled out cryptocurrency-payment support for varied companies at its hottest seashores. A personal consortium of firms in Busan additionally indicated that it’s going to flip to blockchain know-how to power a planned platform for medical tourism.
Greater than 1 million South Koreans have additionally shifted from holding bodily driver’s licenses to a digital, blockchain-based different in a government-sanctioned venture that only launched in May 2020. South Korean drivers may be passing through blockchain-powered toll gates within the subsequent few months, with a neighborhood financial institution and the Korean expressway company launching the project in August. 4 of South Korea’s greatest banks are additionally planning to offer cryptocurrency custody services, as reported by Cointelegraph earlier this yr.
Cryptocurrency exchanges and particular person customers additionally breathed a sigh of aid in December, as the federal government determined to postpone a new tax regime for the trade till 2022. South Korean legislators had finalized new tax rates for cryptocurrency buying and selling in July, which is able to see buyers within the nation pay a 20% tax price on revenue from crypto buying and selling value greater than 2.5 million received ($2,260) a yr. Numerous native trade members played a role within the postponement after lobbying towards the brand new tax regime being applied this yr.
The sheer quantity of progress made within the blockchain and cryptocurrency house in South Korea has reaffirmed the nation’s spot as a world chief in 2020.
America makes this listing not for its regulatory measures however for the position that the standard monetary sector has unwittingly performed within the promotion of cryptocurrency use this yr.
Earlier this yr, the U.S. Commodity Futures Buying and selling Fee made it clear that Bitcoin and Ether (ETH) are labeled as commodities within the eyes of the state. With regulatory parameters fairly clear, each have been actively traded and gathered, and wholesome futures markets and different merchandise have been developed in consequence.
On the flip aspect, the U.S. Securities and Alternate Fee dropped a bombshell on Ripple and its XRP token in December, filing a lawsuit against the company for allegedly finishing up an unregistered securities providing over the previous few years. Ripple CEO Brad Garlinghouse has vowed to fight the SEC in court and went so far as labelling the allegations towards Ripple and XRP as an assault on the complete cryptocurrency trade.
The scenario is a stark reminder to the blockchain and cryptocurrency house that regulators in America are maintaining a eager eye on preliminary coin choices and fundraising initiatives that might fall below the jurisdiction of commodities and securities legal guidelines.
Brushing apart regulatory issues, 2020 has been a large yr for Bitcoin and Ether specifically within the U.S., as quite a few trade members and large gamers from the standard enterprise and finance sphere have aggressively entered the crypto markets.
Enterprise intelligence agency MicroStrategy grabbed headlines for its choice to make Bitcoin its major treasury reserve asset this yr. Its CEO, Michael Saylor, has been particularly bullish about the cryptocurrency’s position in offsetting potential fiat forex devaluation on account of ongoing fiscal stimulus measures by the U.S. Federal Reserve.
MicroStrategy has guess huge on Bitcoin, having purchased over $1 billion worth of the cryptocurrency up to now 5 months, which was facilitated by American alternate Coinbase. The agency additionally completed a $650-million private bond sale in December that will probably be used to purchase extra Bitcoin. The agency now holds 70,470 Bitcoin, according to Saylor.
Quite a few main asset administration companies has additionally climbed into the cryptocurrency markets. The Grayscale Bitcoin Belief had its greatest yr so far and now holds over $10 billion worth of BTC; One River Digital is aiming to own over $1 billion value of Bitcoin and Ether in 2021; and life insurance coverage supplier MassMutual purchased $100 million of Bitcoin to realize “significant publicity to a rising financial facet of our more and more digital world.”
International funds large PayPal additionally performed a job within the resurgence of Bitcoin in 2020 because it introduced that it might offer cryptocurrency custody and payment support by choose distributors that use the platform. The transfer basically takes cryptocurrency towards actual mainstream use — contemplating that the platform has over 340 million customers worldwide.
Coinbase additionally revealed in December that it’s planning an initial public offering that can take the corporate public after the SEC completes its assessment means of the submitting. The transfer is a serious one, contemplating that the world is but to see one among its main cryptocurrency exchanges publicly traded.
With a wholesome cryptocurrency buying and selling surroundings and a wide range of cryptocurrency-focused monetary merchandise comparable to futures out there to the general public, the U.S. has been a driving pressure for cryptocurrency adoption and use in 2020.