10 countries where cryptocurrency is legal
The world of the crypto-industry has grown considerably since bitcoin first debuted in 2009. However, despite the enormous popularity of cryptocurrencies, their legality is still questioned in many countries. In this article, we will talk about ten countries that have still managed to develop certain leadership concepts and accept digital currency legally.
Why is the legal status of cryptocurrencies important?
What many people know about cryptocurrencies is the ability to conduct anonymous transactions between users around the world. But at the same time, anonymity has another side and is associated with high risks of fraud, and the lack of regulatory control over cryptocurrencies creates doubts about their credibility.
If you are going to work with digital currencies, the first thing you need to do is check their legal status. This way, you can learn about the legal obligations of working with cryptocurrencies in different jurisdictions and avoid penalties for committing illegal activities.
A list of some countries where cryptocurrency is legal
1. El Salvador
El Salvador is the first country in the world to recognize bitcoin as legal tender and has set an example for many other countries to move towards mass adoption of crypto. And although El Salvador imposes certain restrictions on cryptocurrencies, foreign investors have been exempted from income or capital gains taxes on cryptocurrencies.
The Slovenian government encourages the transition to blockchain technology in various fields and offers many tax incentives for cryptocurrency trading. Slovenia also imposes no VAT on mining, making it one of the most attractive countries for the development of the crypto industry.
Germany's unique approach is that cryptocurrency here is considered private money, not assets. Moreover, long-term investors who own a cryptocurrency for more than a year receive an exemption from capital gains taxes.
The legal framework in Canada classifies cryptocompanies as money services businesses, or MSBs, and requires them to register with the Financial Transaction Analysis and Reporting Centre of Canada (FINTRAC). This ensures that blockchain companies have legal backing for their operations in the country.
Cryptocurrency legality and tax incentives have attracted many large cryptocurrency companies, such as Binance, to Malta. In addition, the Maltese government has developed many pieces of legislation, making the crypto business in the country an even more attractive prospect. One obvious plus is that crypto investors also don't have to worry about long-term capital gains taxes on their assets.
6. The Netherlands
Another of the most cryptocurrency-friendly countries is the Netherlands. In addition to its proactive approach to introducing new concepts, the Netherlands is also known for enforcing the recommendations of the Financial Action Task Force (FATF) on cryptocurrency regulation.
Singapore, which legalized cryptocurrency in 2022, serves as a favorable place for crypto investors worldwide and offers many legal options for blockchain and crypto-enterprises. For example, you don't have to meet cryptocurrency obligations to make trading profits, and crypto transactions are generally perceived as barter trade, which eliminates them from the realm of taxation.
Estonia's relaxed regulatory environment for cryptocurrencies allows companies to operate safely without legal complications, and the financial services sector shows better support for the use of cryptocurrencies. At the same time, Estonia is developing its national cryptocurrency, Estcoin.
Switzerland is one of the countries that allows cryptocurrency use with maximum tax benefits and offers a real opportunity for many crypto startups. Its banking system with low taxes and a high degree of privacy has earned a special reputation around the world.
Portugal is the most secure tax haven for cryptocurrencies. In addition to cryptocurrency tax exemptions, the country also has favorable and progressive legislation to encourage the adoption of digital currencies. Notably, non-EU residents can also obtain a residence permit in Portugal and enjoy cryptocurrency tax exemptions.
Cryptocurrency legalization is a long and complicated process for every state, but as you can see, there are already many positive examples of the legal implementation of digital currency into the economic system. As cryptocurrency spreads around the world, so does the value of the regulations that govern it.