A birds-eye view of five crypto-friendly countries. There are many other crypto-friendly countries that could also have been included, these were just some of my favorites.
El Salvador
El Salvador is likely the first place that comes to mind recently, as far as crypto-friendly countries go. In 2021 they passed a law that made them the first country in the world to accept Bitcoin as legal tender and have proposed issuing bonds backed by cryptocurrencies.
They also announced plans to build the world's first Bitcoin City, a proposal that entails using geothermal energy from a volcano to power both the city and Bitcoin mining operations.
El Salvador does not tax income from mining or other crypto-related activities, nor profit from trading and investments.
Singapore
Singapore, nicknamed “Asia’s Silicon Valley”, is a major tech hub with a business-friendly economy. They are developing regulations that are intended to prevent illegal activities like money laundering, without imposing unnecessarily heavy regulation on cryptocurrencies in general. However, after the recent series of CeFi failures, they are also rumored to be tightening retail-investor access to crypto.
Singapore does not have a capital gains tax and they do not tax goods and services paid for in crypto. They do have income tax on crypto-related activities like staking, but this does not appear to include taxation on mining unless you're a large-scale operator.
Switzerland
Switzerland has long been famous for its banks, which are estimated to hold assets worth at least five times more than the country's GDP. Swiss banks are known for minimizing risk and maximizing privacy and security, which are also highly desirable traits for cryptocurrencies. Starting in 2018, Swiss banks were the first place that crypto companies were able to open business accounts within the traditional banking system.
Switzerland classifies cryptocurrencies as an asset and each region within the country has its own regulations but most are considered to be very crypto-friendly. Three of the top cryptocurrencies are based in Switzerland: Ethereum, Cardano, and Polkadot.
The town of Zug, nicknamed "Crypto Valley", is the most notable place in Switzerland for cryptocurrency, being home to more than 450 companies related to blockchain. The city of Lugano has also been in the news recently for its stated goal of accepting crypto for all goods and services within the city, along with its collaboration with Tether which enables tax payments in USDT.
Switzerland does not have capital gains tax but does have a wealth tax in addition to taxing mining and professional trading.
Vanuatu
Vanuatu allows people to pay $130,000 in Bitcoin to gain citizenship for 5 years and was the first country to offer this type of arrangement. Several other countries have since copied this type of arrangement, primarily in the Caribbean.
The country also recently announced plans to build Satoshi Island, proposed as somewhere for crypto enthusiasts to live, featuring sustainably-built homes in a community organized by decentralized autonomous organizations, or DAOs, where ownership is represented by NFTs.
Vanuatu is almost essentially a zero-tax country and does not tax on wealth, income, or inheritance; the only tax is a service tax on products purchased offshore in Vatu currency.
Bermuda
Bermuda has been crypto-friendly for many years. In 2018, the Bermuda Monetary Authority signed the Digital Asset Business Act to create a legal framework around cryptocurrency, which was one of the first of these types of regulations in the world. In 2020, the Bermuda Stock Exchange announced a Bitcoin ETF which then went live in 2021.
Bermuda does not have income or capital gains taxes and has made crypto transactions tax-free. If you end up owing taxes for another reason, they will even let you pay in USDC.
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