As El Salvador becomes the first country to adopt Bitcoin, let’s take a look at the most Bitcoin-friendly countries

Bitcoin fans had a reason to rejoice this week. El Salvador became the first country in the world to adopt Bitcoin as a legal currency. The historical decision is part of the country’s effort to boost investment and economic development, but also promote financial inclusion and innovation. El Salvador’s president said that the decision would make it easier for Salvadoreans living abroad to send money home.    

The news came at a crucial moment for cryptocurrency. Bitcoin’s price during the last weeks has been affected by a torrent of bad news, that included calls for regulation, as well as Tesla CEO Elon Musk’s decision to stop accepting Bitcoin as payment. However, following the El Salvador news, its price surged from $33, 416 on Tuesday to $37,373 on Thursday. 

Not everyone is cheering for Bitcoin, but the recent developments could suggest that its recent downturn could potentially be reversed, especially if more countries decide to follow El Salvador’s example. Could this recent decision spark a wave of support for Bitcoin from other governments? There are definitely some good candidates on the Bitcoin-friendly country list that could potentially follow suit.

Let’s have a look at some of the Bitcoin-friendly countries.

Bitcoin-friendly countries

A few countries worldwide are friendly to Bitcoin and those include Belarus, Denmark and Singapore. Earlier this year, Singapore became the first country in Asia to offer a crypto exchange, as DBS, the largest bank in Southeast Asia, launched its own digital exchange.  Currently, the 4 that rank higher on our list are the following:

El Salvador

After the recent decision to make Bitcoin legal, El Salvador is currently the world’s most  Bitcoin-friendly country. According to the new law, every business must accept Bitcoin as legal tender for goods and services, unless it lacks the technology that is needed to make the transaction. Poverty in El Salvador is an immense social problem and, according to BBC, 70% of Salvadoreans do not have bank accounts. The move to adopt Bitcoin aims to open up financial services to the most disadvantaged and allow their families who live abroad to send them money. 

Japan

 The world’s third-largest economy has been very supportive of Bitcoin. In 2017 it was officially recognised as a valid payment method. In Japan, cryptocurrency is classified as an “asset” but it isn’t a legally recognised currency or legal tender. Cryptocurrency exchange might be legal in Japan, however, there has been some growing concern regarding crypto regulation after Coincheck’s $530 million currency heist. 

United States

With a total number of Bitcoin ATMs in 18,529 locations, the U.S. deserves a place on this list. The U.S. has the most Bitcoin holders in the world, and let’s not forget it also has Silicon Valley, which is home to numerous cryptocurrency and blockchain-related startups. Overall the United States boasts the most crypto exchanges and trading platforms, crypto mining facilities and blockchain-oriented projects. However, it’s not without challenges. There have been calls for a stricter stance towards cryptocurrencies, alongside Joe Biden’s efforts to raise taxes on the wealthiest Americans. In May the U.S. Treasury Department announced that it is taking steps to crack down on cryptocurrency markets and transactions, so the landscape for Bitcoin could potentially be changing in the future. 

Switzerland

The land of banks and watches has developed a taste for cryptocurrencies and blockchain. The Swiss canton of Zug has been nicknamed “Cryptovalley” because of its friendly crypto regulation. An innovative tax initiative allows residents of Zug, home to the iconic medieval town, to pay taxes in cryptocurrencies if they choose to. 

Bitcoin unfriendly countries

There are countries that have taken a tough stance against cryptocurrencies, including India, Turkey and Egypt. Most recently China cracked down on cryptocurrency, banning banks and payment firms from providing services related to cryptocurrency transactions. India is another country that has been flirting with a Bitcoin ban, but some recent reports suggest that after the El Salvador news, it might move to classify Bitcoin as an asset class. 

Ecuador and Bolivia have also banned cryptocurrencies. Bolivia has banned decentralised cryptocurrencies and only accepts those created by the government to protect national currency. Ecuador followed Bolivia’s example. It would be interesting to see if El Salvador’s news will have an effect on these crypto bans, or not. 

The article contains market commentary information, it should not be regarded as investment research or investment advice. Past performance is not a reliable indicator for the future.

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