In an increasingly digitized and connected world, cryptocurrencies have emerged as a transformative force in the global financial landscape. What was once considered an emerging and controversial technology is now gaining acceptance and adoption worldwide. From large financial institutions to everyday individuals, more and more people are recognizing the value and potential of cryptocurrencies in their lives and in the economy at large. In this blog, we will explore the growing trend of positive cryptocurrency adoption worldwide.
The Cryptographic Revolution in Europe
Europe stands out as a pioneer in the legalization of cryptocurrencies, with a total of 39 countries within the region recognizing the legitimacy of Bitcoin and other digital currencies. From nations like Spain to Russia, the European Union has adopted a holistic approach to the cryptographic industry. A significant milestone in this regulatory path is the implementation of the MiCA Law, which sets a global standard for harmonizing cryptocurrencies and marks a new paradigm in sector regulation.
Key Highlights:
Europe leads global legalization with the backing of 39 countries within the region.
The introduction of the MiCA Law represents a milestone in cryptocurrency regulation, establishing a comprehensive standard for the industry.
The region shows growing interest in a variety of crypto assets, including layer 1 coins, artificial intelligence, and tokens related to DeFi and GameFi.
Cryptocurrency Regulatory Advances
During the year 2024, over 40 countries have enacted legislation focused on cryptocurrencies, with a total of 42 nations involved in various initiatives to develop regulations and laws in this area. These actions range from parliamentary and extra-parliamentary debates to the approval of specific laws.
These regulatory and legislative initiatives primarily focus on four key areas: regulation of stablecoins, compliance with travel rule standards, licensing and guidance for exchange listing, and development of a general regulatory framework for cryptocurrencies.
However, only 23 countries, including Japan and several EU member states, have participated in initiatives covering all the aforementioned areas. Other countries, such as India or Brazil, have focused their efforts on one or two specific areas, showing more cautious attitudes toward the cryptocurrency industry.
The report also highlights that cryptocurrency travel rules have been the most developed, with advancements by 40 out of the 42 analyzed countries. These regulations require cryptocurrency service providers to share transaction information to prevent money laundering and other illicit activities. In comparison, stablecoin regulation has received less attention from nations.
Latin America and Bitcoin
In the emerging landscape of cryptocurrency adoption, countries like Brazil and Argentina are emerging as prominent players. Brazil has attracted investments exceeding USD $150 billion in cryptocurrencies, while Argentina has accumulated over USD $100 billion in this field. Other countries in the region, such as Colombia, Venezuela, Chile, and Peru, are also experiencing a notable increase in cryptocurrency adoption.
However, each country approaches this phenomenon differently, resulting in significant contrasts. For example, El Salvador has taken a bold stance by making Bitcoin legal tender, a move that has sparked controversy and mixed reactions in terms of acceptance and financial stability. Meanwhile, in Mexico, Senator Indira Kempis’s proposal for a similar initiative has not progressed significantly in the Senate.
The dominant presence of Bitcoin is evident across the region. According to data from Statista and Finder, countries like Mexico show a significant concentration of Bitcoin usage, reaching 22.8%.
Countries Officially Recognizing Bitcoin:
In 2021, the National Assembly of El Salvador passed a historic law legalizing the use of Bitcoin as legal tender within the country. This measure allowed citizens and businesses to operate with the cryptocurrency entirely legally. Additionally, earlier this year, El Salvador further advanced by passing the Digital Securities Law, granting Bitcoin the status of digital commodity and classifying other cryptocurrencies as securities, positioning the country as one of the most progressive in the cryptographic field.
On the other hand, the Central African Republic joined this select group by declaring Bitcoin as legal tender last year. However, in March of this year, the decision was reversed due to the numerous challenges facing the country, such as limited electricity availability, limited internet access, and high levels of poverty. Despite this setback, the Central African Republic continues to show interest in promoting the use of Bitcoin, cryptocurrencies, and blockchain technology as tools to improve financial inclusion and stimulate economic development. Additionally, the country has launched its own digital currency, named Sango Coin, and is exploring the tokenization of its natural resources on the blockchain.
Countries Ranking:
Countries with the highest participation in this emerging market have been identified:
Vietnam: 26% of the population has invested in cryptocurrencies at some point, with Bitcoin being the most popular choice. This phenomenon is largely attributed to the country’s economic growth and ease of access, making Vietnam an attractive market for companies operating with these assets.
United States: Despite challenges faced by sector companies and regulatory advances, 13.22% of the US population invests in cryptocurrencies. Accessibility and a wide variety of offerings are key factors contributing to its leadership in this ranking.
Philippines: 13% of the country’s population owns cryptocurrencies, reflecting a growing interest in digital assets.
India: With 11.5% of the population having invested in cryptocurrencies at some point, the country experiences growing adoption of these assets, driven by the young population and interest in alternative investments.
Singapore: Despite its small population, 11% of the country’s inhabitants own cryptocurrencies, backed by government support for financial technology and a non-restrictive stance toward regulating these assets.
Ukraine: Despite the ongoing conflict, 10.30% of the Ukrainian population owns cryptocurrencies.
Venezuela: With significantly high inflation and high levels of migration, 10.30% of the Venezuelan population has adopted cryptocurrencies as a way to circumvent currency controls.
South Africa: 10% of the South African population has experience with cryptocurrencies.
Thailand: 9.30% of the Thai population owns cryptocurrencies.
Brazil: With 8.30% of the population having owned cryptocurrencies at some point, the largest economy in the region shows a growing interest in these digital assets.
Countries with Bitcoin Tax Exemptions:
El Salvador
The world’s first country to adopt Bitcoin as legal tender. It seeks to attract foreign investors by exempting them from capital gains or income tax on investments in cryptocurrencies within its territory.
Switzerland
Known as a cryptographic haven in Europe, Switzerland considers cryptocurrency transactions similarly to transactions with traditional fiat currencies, exempting them from tax declarations.
Monaco
This preferred destination for large cryptocurrency investors offers crypto-friendly banking that allows the sale of digital assets like Bitcoin without the obligation to declare taxes.
Singapore
Highlighted as a financial technology hub in Southeast Asia, Singapore does not have a capital gains tax, benefiting individuals and companies holding cryptocurrencies.
Gibraltar
Recognized as a quasi-tax haven in Europe, Gibraltar does not tax capital gains from cryptocurrency investments for individuals, although it does impose a 10% tax for companies engaged in cryptocurrency trading.
Portugal
The country does not tax trading or transactions with cryptocurrencies, exempting income and capital gains taxes on these operations.
Belarus
In an attempt to become a crypto-based digital economy, Belarus signed a law in 2017 legalizing cryptocurrencies and exempting taxes on these investments until 2023, when the law would be reviewed.
Malta
Known as the “Blockchain Island,” Malta does not require tax declarations for capital gains or income for investors and companies holding cryptocurrencies. However, trading operations or exchanges are subject to a 35% income tax.
Andorra
This country imposes a 10% tax on profits from the sale of cryptocurrencies, but it is favorable compared to other European countries.
Germany
While Germany is friendly to cryptocurrencies for individual investors, exempting them from paying capital gains tax if they hold the investment for more than a year and up to a maximum value of €600, companies are subject to income tax on profits from cryptocurrencies.
These countries offer a favorable environment for investors and cryptocurrency enthusiasts by not taxing capital gains or income derived from investment in digital assets.
Conclusion
As we witness the global expansion of cryptocurrency adoption, it’s clear that the landscape is evolving rapidly. From its humble beginnings, the crypto market has matured significantly, with numerous countries now acknowledging its potential and actively creating conducive environments for its proliferation. Looking forward to 2024, this trend is expected to continue, marking a journey of remarkable progress and widespread recognition.
Moreover, for those interested in participating in the cryptocurrency market, platforms like Margex offer accessible and secure avenues for trading and investment. With user-friendly interfaces and robust security measures, Margex empowers individuals to engage in cryptocurrency trading confidently, contributing to the broader narrative of crypto adoption and innovation.
