27 May 2022: Slowly but surely, different countries around the world are either turning towards favorable positions when considering cryptocurrencies - or they are outright fighting them. The development of CBDCs encompasses nearly the entirely of global GDP, though some countries like El Salvador are choosing to adopt crypto instead.
When El Salvador decided to adopt Bitcoin as legal tender last year, they broke through a long anticipated barrier some thought would never come - cryptocurrencies like Bitcoin were legitimized as monetary tools. For the first time, a decentralized digital currency was on the same stage as the EURO, USD, or other state-sponsored currency.
This article will provide a brief overview of where Bitcoin & other cryptocurrencies are either legal tender or at least have favorable legislation.
Crypto-Friendly Nations
The cryptocurrency landscape is highly variable between countries and regions in terms of legality & acceptance. Different nations have different established regulations, guiding principles, or norms in terms of availability and usage.
There is a range of sentiment that can be summed up like this, from most favorable to least favorable:
- Legal Tender
- Permissioned Usage
- Restricted
- Prohibited
Legal Tender
There are now two different countries that have adopted Bitcoin as legal tender. They are El Salvador and the Central African Republic. El Salvador was the first in the world to introduce Bitcoin and has since gone all in. In September 2021, El Salvador proposed and passed a bill to officially make Bitcoin legal tender in the country. Businesses would have to accept it and anyone in the country could get a Bitcoin wallet.
Buying before the November 2021 peak, El Salvador is obviously down significantly on its Bitcoin purchases. However, the country is playing the long term card and has since increased its influence over the cryptocurrency adoption market by hosting a 44-country conference talking about monetary & economic policy, Bitcoin adoption, and more.
The Central African Republic (CAP) officially became the second nation in the world to adopt Bitcoin as legal tender in April 2022, nearly exactly one month ago. The country is also in the process of developing a Bitcoin investment platform against the wishes of the World Bank. The world now has two cryptocurrency-powered economies - one in Central America and the other in Africa.
In addition to these two, there are an additional five major countries with no capital gains tax on cryptocurrencies. They are:
- Panama
- Portugal
- Switzerland
- Germany
- Belarus
Bitcoin Nation State Adoption Map - Nakadai
Permissioned Countries
Much of the developed or emerging world allows the usage of cryptocurrencies for investments, transactions, and other means. It is important to note here that these countries do NOT have favorable tax laws and many - like the United Kingdom - are moving towards more unfavorable cryptocurrency regulation. The US-based SEC came out recently and said that the country has "dropped the ball" on crypto regulation.
The following is a list of countries where cryptocurrencies can be freely and openly purchased and used:
- United States
- Mexico
- Brazil
- Chile
- Paraguay
- South Africa
- Europe (excluding Ukraine)
- India (reversed crypto ban)
- Japan
- South Korea
- Australia
- New Zealand
- Philippines
- Thailand
- Malaysia
Unfriendly Crypto Nations
Certain countries have either taken a much more cautious approach to cryptocurrency use, have actively set restrictions against crypto, or are simply prohibiting its usage entirely. Cautious countries are not necessarily unfriendly, but rather have restrictions, tax laws, or other legislation in place that makes cryptocurrencies much more unfavorable.
Restricted Usage
The following list represents nations with restrictions placed on cryptocurrencies:
- Indonesia
- Cambodia
- Vietnam
- Saudi Arabia
- Iran
- Iraq
- Kazakhstan
- Ukraine
- Canada
- Argentina
- Colombia
An interesting country to note here is Canada, where certain exchanges are banned, practices are limited, and taxes tend to be unfavorable for cryptocurrency investors. Another important note to make is that countries such as Saudi Arabia are in the process of not only developing their own CBDC token, but are actively participating in multi-nation collaboration projects to improve the use case and interoperability of CBDCs.
Argentia, despite the high taxes, have been moving slowly more in favor of cryptocurrencies. This comes on the heels of both individuals and businesses migrating towards cryptocurrencies to escape the skyrocketing inflation in the country (inflation rates are as high as 58% YoY in Argentina).
Countries like Iraq & Ukraine are obvious in this circumstance - war and regional influence plays a major part in the ability of a nation to even consider digital technologies like cryptocurrencies.
Prohibitors
There are very few countries in the world that have outright banned cryptocurrencies or made them illegal.
That list includes the following:
- China
- Bolivia
- Dominican Republic
- Western Sahara
- Morocco
- Algeria
- Egypt
- North Korea
China is currently leading the world's top CBDC interoperability project. The digital yuan is being pushed everywhere in China right now after they kicked out Bitcoin miners and banned cryptocurrency trading. As the CBDC market grows, so too does China's influence on the matter. The other nations on this list, North Korea being the obvious one, have had more authoritarian governments and therefore have more monetary restrictions than some other countries.
Summary
When compiling these countries onto a single global map, the adoption and favorability of cryptocurrencies can be summarized like this:
Legal Status of Cryptocurrencies - Manabimasu
- Orange - legal tender
- Green - permissioned
- Yellow - restricted
- Pink - outdated laws
- Red - prohibited
Overall, cryptocurrency use and adoption has been allowed to flourish in most of the world. Western civilization (including Europe, US, ect.) has typically held favorable views of crypto. Africa is a question market mostly due to the lack of data, though projects such as Cardano (ADA) have made an effort to establish themselves there.
China is the world's leading aggressor towards cryptocurrencies - obviously making the push for the world to utilize the digital yuan over cryptocurrencies and fiat currencies like the USD.
2022, despite the bear market or "cryptoeconomic recession", has seen the normalization of many decentralized technologies, including:
- Distributed ledger technologies (DLTs)
- GameFi, DeFi, general Fintech innovations
- Cryptocurrencies
- Decentralized Autonomous Organizations (DAOs)
We expect that cryptocurrency favorability will continue to expand and become reinforced over time, especially in "brain drain" countries like Italy, Portugal, and Greece as well as emerging markets like the Global South (Latin, South America) and Africa.
Coming RekTimes Articles:
- RekTimes Weekly Markets 1.34 (SUNDAY)
- Overview of Germany & Blockchain Adoption (BY JUNE 5)
- Update on AMPL/SPOT Project (BY JUNE 5)
Long Term Projects
- Investigation on MOBI
- Q2 Summary Report
- SPECIAL: RekTimes Expansion
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