Finland has been at the forefront of technological innovation, known best probably for being the home of Nokia. The Finnish Central Board of Taxes (CBT) regulator has classified Bitcoin as a financial service, exempting it and bitcoin purchases from the VAT. The country now has integrated Bitcoin ATMs, given its population of around 5.5million, it boasts 10 in the capital of Helsinki. The country is also home to the Cryptocurrency exchanges FinCCX and Bittiraha as well as the leading global P2P bitcoin exchange LocalBitcoins. Its claim to fame is in January of 2016, the most expensive bitcoin sale involving a luxury vehicle took place at the Auto-outlet Helsinki Oy of a Tesla Model S worth over €140,000.
Denmark is one of the most developed countries in the world in terms of living standards, population happiness and technology. Yet, its latest social progression is around eliminating cash in favour of 100% digital currency. For Denmark, it’s not if Cryptocurrency becomes embraced, it’s when. Due to the volatility of Bitcoin, whether it will be used as a means of exchange, an alternative to the central banking monopoly or both, remains to be seen. Furthermore, the Danish Central Bank declared Bitcoin specifically as not a currency, stating that it will not regulate its use in the country. Denmark is home to a number of Bitcoin startups and exchanges such as CCEDK, which has been a prolific innovator in the crypto-space. The trading volume of most cryptocurrency has also proved growth in demand, particularly after plans to eliminate cash were announced in spring 2015.
Similar to its Scandinavian neighbours, Sweden is also keen to eliminate cash. A recent introduction of negative interest rates by the Swedish Riksbank and a surge in demand for bitcoins could become a common reality in the not too distance future as citizens look for an alternative to store their wealth.
The Swedish Financial Supervisory Authority (Finansinspektionen) have legitimized the fast-growing industry in the country by publicly declaring cryptocurrencies as a means of payment. However, so some regulation states businesses interacting with fiat (mainly exchanges) must file for a license in accordance with AML/CTF and KYC regulations. Bitcoin startups in Sweden include the Safello bitcoin exchange and Stockholm-based KnCMiner, a well-known mining hardware developer that has been producing cutting-edge ASIC miners since 2013.
Estonia is fast becoming a tech hub with software giants such as Oracle staking bases there. With a history of entertaining the latest technological innovation, its tech-friendly government seems open to implementing innovations like blockchain technology for healthcare, banking services and even governance by allowing its citizens to become “e-Residents.” Interestingly, it was also one of the first to use a blockchain-based e-voting service that enables people to become shareholders of Nasdaq’s Tallinn Stock Exchange.
Estonia is the birthplace of Skype, with one of the highest internet penetration rates in the world, Estonia is well positioned to be a place where cryptocurrency users can certainly feel welcome.
Any concerns whether The Netherlands is at least Bitcoin-friendly is answered by the fact it has a “Bitcoin City” It has businesses that offer a Bitcoiner most essentials including gas, accommodation, bicycles, and even dental services. Cryptocurrencies are currently not regulated under the Act on Financial Supervision of the Netherlands, which is why numerous startups, Bitcoin ATMs and even a Bitcoin Embassy in the heart of Amsterdam have sprung up as a result. The climate has fostered vibrant crypto communities across the country that host regular meet-ups and events.
Additionally, the country’s banking sector, including ABN Amro and ING, has been increasingly looking at Bitcoin and the blockchain as a way to improve their own technology and cut costs. The Netherlands is a regular host of Cryptocurrencys conferences and Bitcoin companies such as BitPay.
Germany is the wealthiest and strongest economy in Europe and also one of the few countries where Bitcoin is actually recognized as a legal currency. Many countries have not banned Bitcoins outright but have taken a precautionary stance against cryptocurrencies. Bitcoin being legal in Germany has had an impact on the value of Bitcoins due to the perceived legitimacy given to it by such credible Government recognition. German tax laws are also favourable to Bitcoin with an exemption from the 25% tax on profits for Bitcoin that has been held for one year. The country is also home to one of the biggest Bitcoin marketplaces in the world which has recently finalized plans to introduce Ethereum (the second most valuable cryptocurrency) trading into the platform.
Canada is home to numerous Bitcoin startups and ATMs. The country boasts two cities in the eastern and western parts that can be deemed “Bitcoin hubs,”: Toronto and Vancouver. Bitcoin specifically is regulated under the anti-money laundering and counter-terrorist financing laws in Canada following long deliberation and even testimony from Bitcoin experts before the Senate of Canada.
Canada is home to a bustling cryptocurrency community and startups such as Decentral, the Vanbex Group as well as thousands of accepting merchants. Vancouver alone has over 20 Bitcoin ATMs while on September 19th, 2016, Toronto held the largest blockchain conference to date.
The United States
The US is the world’s largest economy and superpower and therefore hosts the highest number of cryptocurrency users and Bitcoin trading volumes in the world. Bolstered by Silicon Valley, which is home to numerous cryptocurrency, blockchain related startups and investors, it has the highest number of Bitcoin ATMs in the world. Moreover, as a global financial powerhouse, many nations across the globe look to the US for guidance in relation to cryptocurrency’s legal status and regulation. This week Trump announces he will be creating a strategy to look at regulation about cryptocurrency. Therefore, the US will be a candle bearer as the testing ground for crypto-regulation in the years ahead.
The UK, well before Brexit anyway, was often seen as the leading global financial hub and a centre of innovation. Therefore, the presence of numerous Bitcoin and blockchain related startups, BTMs, and an active community makes it a Bitcoin-friendly environment indeed. The country also sees new payment solution as inevitable and is preparing itself for mass-scale digital currency adoption in the future, as you can purchase coffee and beverages from many local cafes and pubs.
The Bank of England was critical of Bitcoin this week in Mark Carney’s speech and the BoE has been closely looking at Bitcoin technology and has even requested the public to pitch ideas on how to improve its monetary system. Currently, Bitcoin is treated as “private money,” where VAT is imposed in a normal way from suppliers of any goods or services sold in exchange for bitcoin or other cryptocurrencies. While profits and losses on cryptocurrencies are subject to capital gains tax, similar to the US but is still hard to track, police and enforce.
Australia’s major banks have been reluctant on cryptocurrency but recently moved to remove “double taxation” on Bitcoin, which came as good news to the local community and businesses; particularly after some Bitcoin startups chose to emigrate, in light of unfavourable taxation and reported bank account freezes. Bitcoin, however, remains unregulated as the governor of the Reserve Bank of Australia stated in an interview that “There would be nothing to stop people in this country deciding to transact in some other currency in a shop if they wanted to. There’s no law against that, so we do have competing currencies.”
Last month “Auscoin” released a pre ICO but its legitimacy is still be proved. The Australian Securities Exchange (ASX) is currently testing distributed ledger technology, which could be “the first successful blockchain project in the world.” Moreover, the Australia Post will also consider using distributed ledger technology to store digital identities in an effort to improve service and reverse falling revenue. Proof that crypto and blockchain could save businesses and industry, not destroy them.
I wrote in depth about South Korea’s relationship with cryptocurrency last week. The country has bases for giants such as Samsung and LG, and having one of the highest smartphone penetration and mobile payment rates in the world, it is no surprise South Korea is quickly embracing cryptocurrency both as an investment and means of exchange. For now, there are no laws in the country regulating cryptocurrency use, a number of related startups have sprung up as a result. People can also buy bitcoins at 7-Eleven stores across the country.
Tokyo may no longer be considered as the commercial capital of Asia but potentially the cryptocurrency hub of the region. With China and South Korea taking drastic measures against cryptocurrencies, Japan has been given the opportunity to become a breeding ground for the growth of cryptocurrency trading in Asia. The Japanese Government through the PSA (Payment Services Act) has set up a framework that which makes it legal to use cryptocurrencies for payment purposes. While China may have the monopoly on Bitcoin mining, Japan has the lion share of cryptocurrency trading/exchange activities as far as Asia is concerned.
The FSA which is the financial regulatory arm of the Japanese government also recently approved a number of cryptocurrency exchanges, as well as cryptocurrencies which can be traded on these platforms. Japan is positioning itself to become a major player in the market. With the industry still being in its infancy, there is a desire for friendly environments where the market can thrive. Government regulation isn’t necessarily a bad thing and the involvement of financial regulators in the Japanese crypto scene can give the much-needed incentive to entrepreneurs, developers, and investors to shift focus to the Japanese crypto market.
A few “out of the box”
This week alone has given announcements that Iran is to reportedly develop its own cryptocurrency. Mexico will accompany other countries in regulating cryptocurrency and Venezuela will fundraise for its “Petro” currency. Venezuela is probably the worst economy in the world right now with hyperinflation, mass unemployment and food shortages most of these new country-specific coins and tokens are a way of money laundering, avoid sanctions and create or hide wealth in a bid to try to get away from more serious and long-term economic issues. But if you want to know more, go to Switzerland – the home of the most conferences and seminars on cryptocurrency of any other nation in the world.