Which countries are working on their own cryptocurrency?
Just like any new technology, cryptocurrencies have an adoption curve. In the case of Bitcoin, the innovators were buying BTC at $5 when nobody had ever heard of blockchain.
The early adopters are the next class of people to embrace a technology. We’re somewhere in this stage of the adoption cycle now, as tens of millions of new people are getting involved with crypto.
It’s not just investors though, even governments are taking an interest in crypto and blockchain technology. Although we’ll cover many topics, this article focuses primarily on countries who are either adopting crypto or planning on creating their own government-backed CBDCs (Central Bank Digital Currencies).
Blockchain Innovation Hubs
It can be interesting to look at cryptocurrency by country, to see where some of the best blockchain innovation hubs in the world are located.
First up is Malta, which is often referred to as Blockchain Island. Malta is one of the world’s most successful crypto innovation hubs because of their friendly regulatory atmosphere. Crypto is fully legal in Malta and firms based here can build their business in compliance with the law.
Binance is based in Malta, as is Tron and hundreds of other cryptocurrency projects.
Portugal is another crypto country that has very friendly regulations for cryptocurrency investors and startups. In 2016 Portugal updated their laws to classify crypto as a type of currency. Under this tax code investors don’t have to pay taxes on capital gains from cryptocurrencies.
Getting rid of crypto taxes is a smart move by Portugal. This next bull market in crypto will create a new class of crypto millionaires who may be willing to move to a different country to pay less in taxes.
The more wealthy individuals there are living somewhere, the better that country is going to do economically. The Portuguese government understands how their tax policies can convince the crypto elite to relocate to Portugal and all of the benefits that can create for the country.
Singapore is also friendly to the crypto industry. Recently, the Singapore bank DBS announced their plans to create a digital asset exchange platform. This exchange will only be available to large institutions and accredited investors at first, but it could open up to the general public later on.
The bank of Singapore has stated that Bitcoin could replace gold as the preferred store of value in the coming years. Although there is no official announcement to support this idea, some cryptocurrency commentators have speculated that Singapore could be one of the first crypto countries to add BTC to its central bank’s balance sheet.
Regardless of whether that happens, Singapore is one of the world’s most crypto friendly countries.
Which countries are creating their own CBDC?
Even though most of the important innovation is happening in the private sector, governments are also using blockchain to create their own Central Bank Digital Currencies. Here are some of the crypto countries that are in the process of creating a CBDC.
- The Bahamas
- The United States
- The EU
Eventually, most countries will have a CBDC, although it may take ten or twenty years to reach that point.
The Most Popular Crypto Countries
Switzerland might be the best country to start a cryptocurrency project in. America has Silicon Valley but Switzerland has Zug, a city that’s often called Crypto Valley.
One of the key advantages of building a crypto startup in Switzerland is regulatory clarity. Startups can create a product within a clearly defined legal framework. Why is this so important?
Clearly defined cryptocurrency laws are important because it allows a crypto startup to build out its product without worrying about breaking the law. Ripple is a great example of why this is so important.
Ripple is not a company that’s trying to subvert financial laws. Rather, their product is used by heavily regulated banks and Ripple has always done their best to conform to all financial regulations inside the United States. Even though Ripple always tried to work with regulators, at the end of 2020 the SEC hit Ripple with a massive lawsuit.
What’s so aggravating, from Ripple’s perspective, is that it wasn’t at all clear that they were breaking any rules. The regulatory framework for crypto in the United States is so outdated and opaque that it gives regulators a lot of room to interpret the law as they see fit.
Good crypto countries provide clear legal frameworks and regulations so that startups and other crypto firms can operate in full conformity with regulations. This is something that Switzerland has done and it’s the reason why so many crypto firms are based there.
Which countries hold the most Bitcoins?
When you look at cryptocurrency by country, no nation anywhere in the world has come out with an explicit statement saying that they’re buying Bitcoin and holding it as a reserve asset, similar to gold.
Nonetheless, we know that a few countries around the world are very likely holding at least a small amount of BTC. Unfortunately, none of the countries with the most Bitcoin are on friendly terms with the United States.
We know that the Venezuelan government has some Bitcoin since they accept BTC as a payment for certain government services. It’s unclear how much Bitcoin the country has.
Iran is also probably holding some Bitcoin. The Iranian government has taken over a few Bitcoin mining farms and it seems likely that they’re holding some of the BTC from these operations.
North Korea almost definitely has some Bitcoin as well. The North Korean government directly sponsors and enables some of the most successful crypto hackers in the world, and some or all of those proceeds get funneled back to the government.
China also has some Bitcoin that they seized from the PlusToken scam operators. It’s unclear whether China will keep that Bitcoin or auction it off.
Will cryptocurrencies ever take over the world?
Cryptocurrencies will become a normal part of life, just as the internet is part of all our lives now.
In some instances the use case will be explicit, like buying Bitcoin to protect against inflation. In other instances people will use crypto services without even realizing that they’re interfacing with a blockchain.
Smart contracts in particular are going to revolutionize accounting, contract enforcement, international payments and so much more. Once the technology is ready, billions of dollars are going to flow through smart contracts on a daily basis.
While we can say that cryptocurrencies are going to take over the world, it’s still not clear which coins will win in the long run. How many cryptocurrencies exist today? There are several hundred viable projects. So far it seems like Bitcoin and Ethereum will be the big winners, but that can change. Maybe a cryptocurrency that’s not even invented yet ends up dominating the world. Only time will tell.
How many countries have Bitcoin ATMs?
Dozens of countries have at least one Bitcoin ATM. A cryptocurrency by country list of every place with a Bitcoin ATM is available here. Presented below are the top 5 countries, measured by the number of Bitcoin ATMs they have.
- The United States
- The United Kingdom
Crypto Countries with their own Currencies
There are a lot of reasons that governments want to create their own Central Bank Digital Currencies.
First, a CBDC would allow the government to send instant payments to its citizens. This system’s advantage must be quite apparent after what happened with the stimulus check debacle in the United States.
It took the US government months to send money to everyone using an outdated financial tool. With a CBDC the government could send every American a stimulus payment in just seconds.
Second, a CBDC would enable faster payments all over the country. Whether you’re paying your friend at a bar or buying a car, payments would clear instantly. No more depositing your paycheck and waiting a day for it to clear.
Third, from the perspective of a data-hungry government, CBDCs are a blessing. A government can surveil every transaction that takes place with their digital money. The government can also freeze accounts and even reverse transactions. None of that is possible with cash.
The question today isn’t whether we will or won’t move into a cashless society, but whether people choose to use decentralised cryptocurrencies, or passively accept that centralised cryptocurrencies become the norm.
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.