14 Countries at the Forefront of Cryptocurrency Adoption

The popularity of cryptocurrency has grown tremendously in recent years. Coinbase is doing more than 75 billion in quarterly trading, proving an increasing number of people are interested in trading cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH).

Due to this growing popularity, countries across the globe are taking notice and implementing their own crypto laws and regulations. Some have adopted crypto-friendly legislation, while others have gone as far as making cryptocurrencies illegal. 

Let’s look at what makes a country crypto-friendly and the top countries that fit this category. 

What Is a Crypto-Friendly Country?

A crypto-friendly country is one that either fully supports cryptocurrency transactions and blockchain technology or takes a neutral stance. This means that they have:

Legal Clarity and Regulations On Cryptocurrency

A crypto-friendly country has clear laws and regulations concerning the use of crypto. They define how cryptocurrencies are taxed and have explicit payment processing procedures. Clear crypto regulations provide investors and market participants with guidance on offering innovative products and services to a growing marketplace.  

Favorable Tax Treatment

Crypto-friendly countries may introduce favorable tax laws concerning cryptocurrencies and participants in the ecosystem—for example, excluding transactions in crypto assets from capital gains taxes. Also, a crypto-friendly country may provide tax breaks for businesses that develop and use blockchain technology. 

Government support

Another trait of a crypto-friendly country is support and adoption—starting at the government level. A government supportive of the crypto market may fund research and development, provide grants to startups, or create special zones for crypto businesses.

The 14 Top Crypto-Friendly Countries

Now that we’ve explained the core traits of a crypto-friendly country, let’s go over which countries are the most supportive of the crypto market. 

1. El Salvador

El Salvador tops the list as one of the most crypto-friendly countries in the world. The South American nation recently became the first country to classify Bitcoin as legal tender. On top of that, the El Salvadoran government has invested millions of dollars in implementing a nationwide Bitcoin wallet for its citizens. 

By establishing a law requiring businesses to accept Bitcoin, El Salvador’s stated plan is to reduce its dependence on the U.S. dollar. The goal is to stimulate their economy and provide accessible financial services to the more than 70% of Salvadorans without a bank account. 

AlphaPoint was instrumental in integrating its technology into the Chivo Wallet, the world’s first national Bitcoin wallet, with a nationwide merchant infrastructure.  AlphaPoint’s front- and back-end software was designed to offer a smooth user interface (UI), along with intuitive functionality and seamless user experience (UX).

2. Switzerland

In Switzerland, cryptocurrencies aren’t subject to a capital gains tax. However, they are subject to the wealth tax—a small annual tax on the total value of a person’s investment portfolio. 

Many cryptocurrency exchanges are available to Swiss users, and the country’s regulatory framework has been designed to be accepting of cryptocurrencies since they became a worldwide phenomenon.

3. Singapore

Singapore is a major financial center and home to many global companies in the Web3 and crypto industry. 

As a result, Singapore is considered to be one of the friendliest countries for crypto investors and market participants. Singapore doesn’t have a capital gains tax, and it recognizes crypto as a legitimate form of currency and encourages blockchain projects.

4. Hong Kong

Hong Kong is a special province in China and one of the world’s top financial centers. It’s also a haven of crypto market activity, notwithstanding the Chinese government’s ban on all cryptocurrencies in its mainland. 

Hong Kong enjoys an over-the-counter crypto market that drives more than $64 billion in volume, and the country has issued licenses to native crypto exchanges to do business in the region. 

5. Portugal

While Portugal does have capital gains taxes on cryptocurrency assets, it also offers certain tax breaks, such as an exemption from the value-added tax (VAT).

6. Germany

Germany was one of the first countries to accept crypto as a legitimate form of currency and recently rolled out regulations that allow businesses to issue crypto shares.

Germany has also introduced regulatory framework initiatives intended to protect its citizens from consumer fraud, money laundering, and cyberattacks. In addition, the German bank Commerzbank recently became the first financial institution in the country to obtain a cryptocurrency custody license. 

7. Slovenia

In Slovenia, cryptocurrencies still aren’t considered legal tender, but they are classified as virtual currency. While crypto is subject to taxes, the country incentivizes investors to write off crypto-related trading expenses, and there’s no VAT on mining. Slovenia also encourages its citizens to transition to blockchain technology as the future of both finance and modern innovation.

8. Estonia

Estonia has taken a proactive approach to regulating digital currencies, encouraging blockchain technology research innovation. In fact, Estonia was one of the first countries in Europe to offer cryptocurrency business licenses. 

The government continues to be closely involved with the crypto sector, ordering the shutdown of hundreds of crypto enterprises in 2023 which violated compliance laws. Rather than prohibiting crypto activity entirely, Estonia is working to create an environment in which legitimate crypto businesses can find success.

9. Georgia

Georgian citizens and entrepreneurs don’t have to pay taxes on crypto assets. In addition, citizens are exempt from income taxes related to crypto trading profits. These incentives have created a booming crypto market in Georgia. 

10. Ukraine

In the past, Ukraine didn’t have meaningful crypto regulation policies. However, due to its ongoing war with Russia, Ukraine has now legalized cryptocurrencies to boost its war effort. 

This measure has proven to be successful, as the country has reported significant international crypto funds pouring into the country. In fact, the United Nations (UN) relief agency has relied on crypto and blockchain to provide monetary aid to people displaced by the war. 

11. Dubai

Dubai is one of the most famous cities in the United Arab Emirates (UAE). Known for its beautiful skyscrapers, shopping malls, and extravagant hotels, Dubai has become a thriving tourist destination in the Middle East.

Dubai has maintained its positive stance on crypto to encourage foreign crypto investments. As a result, they don’t have capital gains taxes on income and salary. This not only makes Dubai well suited for crypto trading and investing. 

12. Abu Dhabi

Abu Dhabi is the capital of the UAE and another thriving tourist center in the Middle East. Home to white-sand beaches and gigantic shopping malls, Abu Dhabi attracts business people from across the globe. Like Dubai, residents are not subject to income taxes on cryptocurrencies. 

13. Cayman Islands

The Cayman Islands doesn’t have any restrictions or regulations on crypto mining and staking, and the country has no capital gains or income tax. 

14. Puerto Rico

Puerto Rico has become a haven for crypto investors because of its low tax rates, though these benefits are limited to permanent residents. As a result, Puerto Rico is one of the most crypto-friendly regions in the United States. 

How AlphaPoint Helps People Worldwide

The growing popularity of cryptocurrency is making it expedient for merchants to adapt and accept crypto payments. Unfortunately, many businesses lack the internal expertise and tools to navigate the regulatory requirements and deploy their own crypto payment systems.

AlphaPoint is a leading provider of digital asset infrastructure including white-label crypto solutions for exchanges, brokerages, payment networks, and banking. We’ve helped major financial institutions and other businesses integrate effective crypto solutions.  We also have supported governmental initiatives,  such as Chivo, a proprietary Bitcoin wallet for El Salvador’s citizens. 

Explore the Global Future of Crypto With AlphaPoint

Cryptocurrency isn’t going anywhere—it’s already become a part of modern finance and commerce in many countries, and its popularity only continues to grow. But how your nation responds to this ecosystem will be critical as crypto payments become more mainstream across the globe. 

Check out our case studies to learn more about how AlphaPoint can help implement crypto exchange and payment solutions into your business model—no matter where you’re located.