Top 5 crypto hotspots and unfriendly nations

2021 was the year of cryptocurrencies. 2022 will see new heights. And the reasons are quite obvious. The growing interest among the people, especially the young population, the ever-growing value of the currencies, the availability of so many alternative coins, and other blockchain-based applications like Non-fungible tokens (NFTs) and decentralized finance (popularly called DeFi) – the countries are under a lot of pressure.

The choice is tough – experiment by launching a set of regulations and taxation or just go for a blanket ban? There is no midway. No options to ignore it either. Governments have been cautious, though many do not have clarity or precise positioning. Several others are still waging war against these currencies. However, few have either adopted it early or are influenced by the growing hype around it.

Following are the five best crypto-friendly and crypto-hostile countries.

Top 5 Crypto-friendly Nations

Experts believe the following two indicators can be considered to judge the crypto-friendliness of a country:

  • Its keenness to adopt and regulate the currency
  • The degree to which it taxes cryptocurrency


One of the countries to evaluate very early the possibility to incorporate reforms to adopt the blockchain-based currency, it initiated the process as early as 2013. By 2021, Switzerland has a range of company and financial laws to give blockchain commerce a solid legal basis. Two crypto banks already have their licenses, and the country is believed to be a safe haven for many companies dealing with currencies, DeFI, etc. No wonder it is now referred to as the crypto-valley of Europe.

Regarding taxation, the Swiss Federal Tax Administration sees crypto transactions as the same as traditional fiat transactions and exempts them from tax reporting. However, the profits of crypto business and professional trading are liable to income taxation, which differs from region to region, and an annual wealth tax.


One of the pioneers in blockchain technology, Estonia was the first country to issue licenses to crypto businesses in 2017.

These licenses were issued to two sorts of crypto businesses: those wishing to run an exchange and those looking to launch an initial coin offering. In addition, the Estonian government offered “digital residence,” which allowed entrepreneurs or their enterprises to legally base themselves in Estonia, even if they operated elsewhere. As a result, obtaining licenses in the country became easier, attracting crypto enterprises to the region.

However, after all these proactive steps, the government seemed to be cautious now. It revoked 2000 crypto licenses for crypto exchanges and wallets last year, and the recently appointed anti-money-laundering chief wants to nullify the rest. It is now working on a new set of regulations and believes they will improve transparency while reducing the anonymity of crypto transactions, including those involving Bitcoin and NFTs.

In an interview with the media, Matis Maker, Director, Estonia’s Financial Intelligence Unit, said, “We will toughen our supervision, we will toughen our approach which concerns the market entry.”

El Salvador

The latest entrant in the cryptocurrency market, the country has given some of biggest surprises recently. Under the leadership of President Nayib Bukele, the government has done a slew of announcements that raised eyebrows, right from the citizens to the International Monetary Fund. These moves have resulted in large-scale protests over fears of cryptocurrency bringing instability and inflation to the impoverished Latin American country.

Source: NBC News
  • In 2021, El Salvador made Bitcoin legal tender, the first country to do so. At the time, the government released a new digital wallet app, giving away $30 (£22) in Bitcoin to every citizen. More than 200 new cash machines were also installed across the country.
  • The government of El Salvador plans to offer small and medium-sized companies (SME) $10 million in crypto-based loans as of the first quarter of 2022. Acumen, Solana-based lending, and borrowing platform will provide U.S. dollar funding to El Salvador’s National Commission for Micro and Small Enterprises (Conamype), a government entity that allocates financing to local informal entrepreneurs and self-employed workers, Conamype’s president, Paul Steiner, writes CoinDesk.
  • It also plans to build a Bitcoin city at the base of a volcano, with the cryptocurrency used to fund the project. The city will be circular to represent the shape of a large coin and will be built in the south-eastern region of La Unión. The site would take advantage of the Conchagua volcano’s geothermal energy to power Bitcoin mining.


Singapore was known to be the world’s ‘most crypto-friendly economy’ till last week when Singapore’s leading operators of crypto ATMs were forced to shut down their cash machines after the Monetary Authority of Singapore (MAS) outlawed the cash-to-crypto terminals.

The country known for its favorable crypto regulations and legislative environment had taken this step of a broader crackdown on advertising cryptocurrency to the public. The government has Bitcoin ATMs as early as 2014.

Called the Asia hub, the country always provided a level playing field for expanding bitcoin transactions. Singapore law is frequently deployed as the governing law in cryptocurrency-related contracts because of its advanced dispute resolution rules and reputation as an arbitration-friendly and neutral regime. Furthermore, because cryptocurrencies are allowed in Singapore, any contract involving them would not be considered illegal.

Over 550,000 Singaporeans — making up 9.4 percent of the country’s total population — are crypto-owners. The country’s biggest Bank DBS Group has also created a platform to facilitate digital token transactions.


The country has been quite proactive by creating a positive eco-system to promote cryptocurrencies and introducing tax guidelines on digital asset transactions. In 2018, the government introduced three new laws enabling blockchain-based businesses: The Malta Digital Innovation Authority Bill, The Technology Arrangements and Services Bill, and the Virtual Financial Assets Bill.

As per Kluwertax Blog:

The Malta Commissioner for Revenue has adopted quite a straightforward approach to the treatment of cryptocurrencies for income tax purposes. All the old principles and jurisprudence in relation to income and capital is by analogy applicable to transactions involving cryptocurrencies.

Several major Exchanges and blockchain projects operate from Malta. The country is part of the European Union, giving access to the largest markets in the world. Binance, one of the leading exchange platforms, operates from Malta. It moved operations away from Hong Kong and China due to increased regulatory scrutiny.

Five top countries not ready to adopt cryptocurrencies


Once known as the Bitcoin trading and mining capital of the world, finally banned non-government-approved cryptocurrencies in September 2021. It was one of the first countries whose people quickly embraced cryptocurrency.

The procedure of banning was done in a very phased manner. The government cited its concern about crypto’s mining effect on the environment and people using digital currencies for fraud and money laundering.

The Fortune Magazine wrote earlier this year:

First the country prohibited financial institutions from engaging in any crypto transactions in May. Then it banned all domestic crypto mining in June, and finally outlawed cryptocurrencies outright in September.


Russia passed its first laws to regulate cryptos in July 2020, which designated cryptocurrency as property liable to taxation for the first time. However, earlier this month, the country’s central Bank has proposed banning the use and mining of cryptocurrencies on Russian territory, citing them as volatile and widely used in illegal activities. The Bank has come out with a consultation paper that plans the future of cryptocurrencies in the country. Titled “Cryptocurrencies: Trends, Risks and Regulations,” the paper proposes a blanket ban on the use and mining of all cryptocurrencies. The Bank has argued for years against cryptocurrencies, saying they could be used in money laundering or to finance terrorism.


Pakistan has banned cryptocurrencies a few years back, followed by a recommendation by the State Bank of Pakistan. Recently, it has asked the authorities to block more than 1,600 crypto websites by the Federal Investigation Agency (FIA). However, it is still unsure and evaluating whether to ban or regulate cryptocurrency.


Cryptocurrencies are banned in the country. Additionally, the government took one more step to discourage any activities around it – an amendment has been introduced to penalize the promotion of crypto. “It imposes a penalty of five years in prison and/or a fine between Dh250,000 and Dh1 million against those who promote electronic currencies or fake companies to raise money from the public without a licence from competent authorities,” a media has reported.


In Morocco, Bitcoin and cryptocurrency transactions have been banned since November 2017. Before that, the country did not have a strong community, and hence this move by the government went unopposed. The government cited the lack of regulations for banning it. Experts believe the decision was made to discourage the flow of remittances through any channel other than the Central Bank of Morocco (Bank Al-Maghrib), thereby safeguarding the country’s foreign currency reserves. Cryptocurrencies would have facilitated the flow of remittances without the government’s control.

Other than these five mentioned above, many more countries like Egypt, Iraq, Qatar, Oman, Algeria, Tunisia, and Bangladesh have banned cryptocurrency. Forty-two other countries, including Algeria, Bahrain, Bangladesh, and Bolivia, have implicitly banned digital currencies by putting restrictions on the ability of banks to deal with crypto or prohibiting cryptocurrency exchanges. Other countries like India and the UK are still working on their regulations.

Experts across the world believe finding a solution could be the best way forward, banning the currency is not feasible anymore. Elon Musk also resonated a similar opinion when he said while the advancement of cryptocurrencies can be slowed down by governments delaying regulation and legalization processes, these digital assets cannot be destroyed now. If we go by Mathew McDermott, Goldman Sachs’ global head of digital assets, “Bitcoin is now considered an investable asset. It has its own idiosyncratic risk, partly because it’s still relatively new and going through an adoption phase…But clients and beyond are largely treating it as a new asset class, which is notable—it’s not often that we get to witness the emergence of a new asset class.”


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