For several years after the emergence of Bitcoin, and then altcoins, interest in cryptocurrencies was shown only by individual Internet users or progressive companies. Meanwhile, states largely ignored this new virtual currency, not perceiving it as something worthy of serious attention. However, over time, the popularity of digital money began to grow by leaps and bounds, and the leaders of many countries were forced to think about developing regulations for its use. Initially, a clear legal base was established, followed by amendments allowing the use of decentralized payment systems.
More to come! In the case of some advanced states that have legalized digital assets, experts have started talking about the beginning of the process of tokenizing the economy. Today we will tell you about ten countries that have believed in cryptocurrency and allowed its use at the official level.
This European Union state was one of the first to regulate cryptocurrencies at the legal level, recognizing them as a financial instrument. The Central Bank of Germany defines digital assets as "private money" that can be used for settlements between banks and commercial organizations. Each purchase paid with virtual currency is subject to VAT, while cryptocurrency transactions are not taxed.
In Germany, the issuance, possession, and trading of digital money, as well as mining, are legally permitted.
This country ranks second in the world in the number of BTC ATMs installed within its territory. Although Bitcoin and altcoins are not legally considered as means of payment in Canada, transactions for goods and services in virtual money are conducted on general terms. However, the sale of goods and services for digital assets implies VAT payment. Residents of the state are also required to pay tax on income earned from investing in cryptocurrencies.
Here, virtual assets are a full-fledged market instrument, cryptocurrency companies are legalized, and citizens can use digital coins for payment transactions.
The Ministry of Finance of Malta has developed a special law with provisions regulating the circulation of cryptocurrency. Meanwhile, virtual funds in the state are controlled by the Digital Innovation Authority, not the Central Bank of the country. This decision by the Maltese authorities has helped to prevent conflict between cryptocurrency funds and fiat money.
Cryptocurrency was officially recognized as a digital asset in this country back in 2013. Meanwhile, profits from the sale of virtual coins in Norway are subject to a special tax. Until 2017, this was the traditional VAT, but later the government abolished it for transactions with electronic coins.
The country's leadership officially considers cryptocurrencies as a financial asset. The activities of local companies in buying and selling virtual currencies are subject to a 7% tax, while long-term investments in crypto assets by private individuals are not subject to tax accounting.
Singapore's jurisdiction has managed to lay the foundations for flexible regulation in the field of digital assets, so many large companies are eager to register in this state. Virtual assets in the country are controlled by the local regulator – the Central Bank and Monetary Authority of Singapore.
Cryptocurrency operations in the country have been legalized by the Securities and Exchange Commission (SEC) since 2015. They are subject to tax, while the tax rules are set independently by each state.
Cryptocurrency users are required to pay both local and federal income tax on income earned from mining, investing, or exchanging goods for digital assets.
This is one of the few Eastern European countries where the use of cryptocurrencies is allowed. Meanwhile, the Central Bank of the state has determined that operations with virtual money are not subject to licensing and additional taxes. The only requirement of the Czech leadership is that owners of cryptocurrency exchanges, BTC ATMs, and organizations exchanging digital currencies for fiat must verify their clients.
The need to regulate cryptocurrency in the country was first discussed in 2013, but at that time the issue remained at the level of discussion. Three years later, the authorities of one of Switzerland's largest cities – Zug – began accepting Bitcoin for the payment of state and municipal services.
Later, electronic currency began to be actively integrated into the daily life of the population in other regions of the country. Despite the lack of clear legal regulation of digital money, today Switzerland is one of the most popular countries for registering blockchain startups and crypto businesses.
Individuals here can conduct virtual currency operations without limitations. They are exempt from VAT; however, some of these operations require obtaining a license.
Swedish authorities view electronic money as a means of payment, but it is not legally defined as such. Income from mining and cryptocurrency sales in the country is subject to income tax.
Swedish financial regulators have legalized Bitcoin ATMs and private cryptocurrency exchange operations. However, such procedures are restricted by anti-money laundering and counter-terrorism laws.
In the spring of 2017, the country's parliament recognized Bitcoin and other cryptocurrencies as legal means of payment in the state. According to Japanese laws, virtual currencies are not considered full-fledged currencies but can be used for payments on par with fiat currencies. Cryptocurrency transactions are exempt from VAT.
Cryptocurrency exchanges in Japan also have an official status and must be licensed.