It’s been an extraordinary year for cryptocurrency, and we’re only just heading into Q2. There has been impressive growth in cryptocurrency companies and altcoin valuations, while new and more exciting applications of blockchain have been discovered and suggested from innovators worldwide. As it’s become clear that cryptocurrencies are not just a passing trend, —but rather a lasting shift in the way we think of, invest in, and trade currencies— governments around the world have responded in different ways. Some, like China, appear to be openly hostile toward it, while many others are moving the industry forward and supporting both the underlying technology and use-cases for cryptocurrency. Here are some of the nations that are embracing this new era.
Canada has become one of the top cryptocurrency hubs in the world, with the cities of Toronto and Vancouver being especially crypto-forward. Back in August 2017, Canadian financial regulators approved its first ICO, Impak Coin, and this past February, the country launched its first blockchain exchange traded fund (ETF). But it’s not just about ICOs and ETFs; in 2018, at least 50 blockchain and cryptocurrency-related firms are expected to list on Canadian stock exchanges.
These firms offer investors an easy way to gain cryptocurrency exposure in their portfolios in a manner they are already familiar with.
Read also: How Canada is Embracing Cryptocurrencies.
In America, financial regulators are striking a careful balance between protecting investors and driving innovation. The Securities and Exchange Commission (SEC) has issued warnings regarding cryptocurrency trading and ICOs, and many ICOs specifically disallow US residents from participating. However, the US Commodity Futures Trading Commission (CFTC) has also allowed both the CME and the CBOE to launch a Bitcoin futures market. Furthermore, the regulator also recently permitted its own employees to begin trading in cryptocurrencies.
Month by month, cryptocurrencies are becoming increasingly mainstream in the United States. Currently, there are over 1,500 Bitcoin ATMS—the highest per nation in the world.
Swedish authorities are resolute in their determination to transition into a cashless society. Their support of cryptocurrencies is a natural extension of this initiative, empowering citizens to find more secure and digital ways of making transactions. The Swedish Financial Supervisory Authority has already publicly declared that Bitcoin and other cryptocurrencies as a “means of payment”, paving the way for more legislation that legitimizes altcoins as official currencies.
Furthermore, the Swedish central bank, the Riksbank, is planning to issue its own cryptocurrency, appropriately dubbed the ‘e-krona’.
With the nearby countries of South Korea and China both hesitant to legitimize cryptocurrencies, Japan has risen as the cryptocurrency hub of the region. According to Cryptocompare, almost 60% of all Bitcoin trades use the yen. In 2017, Japan’s Financial Services Agency also confirmed that cryptocurrencies could be used as legally accepted means of payment.
Japan was also the first country to oversee cryptocurrency exchanges at the national level. Currently, 16 cryptocurrency exchanges are now registered, with a further 16 applications under review. In the wake of the Coincheck heist, these 16 registered exchanges have announced that they are setting up a self-regulatory body to increase investor confidence.
Estonia’s government has shown itself to be technologically progressive, and has embraced the cryptocurrency movement. A digital-first society, its its innovative e-residency program even allows non-Estonians to claim virtual residency in order to access Estonian services like banking and payment processing. The government itself wants to launch its own cryptocurrency, dubbed ‘estcoin’. This will likely be done via public crowdfunding, making it the first government-backed ICO.
As a government initiative, the launch of the estcoin would also help to clarify regulations surrounding ICOs, setting up Estonia to be a future ‘ICO haven’.
This city-state is the financial hub of Southeast Asia, and its financial authorities are highly supportive of the cryptocurrency movement. Its central bank has recently noted that there is “no strong case to ban cryptocurrency trading” and its main financial regulator, the Monetary Authority of Singapore, has launched a project exploring the use of blockchain technology for clearing and settling payments and securities. It has also expressed support for trialing certain ICOs through its regulatory sandbox program. This might set up the country to become the region’s ICO hub.
Finally, Singapore also has one of the most favorable tax regimes in the world. Considering that at present cryptocurrencies are subject to normal tax rates, this is an extra plus for cryptocurrency investors.
The German federal authority considers cryptocurrency as a legal means of payment, and is not subject to tax when used as payment. In March 2018, the German National Tourist Board, which is financed by the German National Ministry of Economy and Technology, announced that it would be accepting payment in cryptocurrencies for services. As GNTB Chair Petra Hedorfer stated: “By accepting cryptocurrencies as means of payment and with the possible implementation of the blockchain technology in our finances, we want to position ourselves as an innovation driver in the tourism industry.”
With German government institutions recognizing the potential of blockchain technology and more importantly taking concrete steps towards promoting it, Germany is definitely one European country leading the cryptocurrency movement.
With so many nations leading the charge, it seems a tipping point is on the horizon—one that will shift the way our finances (and societies) function for the better.
Credit: Shutterstock / Lior Farez