As an investor, it’s important to be able to see your investments from all angles. I’m sure you’ve spent a good deal of time researching your picks. You’ve probably read the whitepaper all the way through and you’ve thoroughly researched the team. Have you stopped to consider the country your investment is situated in though? If you haven’t then you may want to start doing so right now.
Cryptocurrency is still pretty new as far as the financial world is concerned, and countries across the globe are running to catch up. You didn’t think that these markets would go on unregulated forever, did you? The time for that is coming to a close, and it would be in your best interest to figure out exactly where your investments stand when it comes to the local authorities.
In this article, we’re going to go over what exactly a nation’s regulations could mean for your investment, and we’re also going to talk about some of the most cryptocurrency friendly countries in the world! (Want to see the worst? Check out the countries section and sort by the worst safety ranking option.)
In the case of community coins, in most cases, it will not matter. However, more and more cryptocurrency projects are actually being launched using crowdsale methods. That means that most countries will consider these as something akin to securities, and they will want to treat them as such.
While once this was a legal grey area, it’s becoming quite clear that world governments are no longer content to allow these projects to operate without any guidelines any longer. Several key markets are getting ready to announce their specific guidelines very soon, and what they have to say could greatly influence the price of your investments.
The most obvious example of this is when China announced that all ICOs within the country would need to cease collecting investor’s funds. This news sent the market into a panic, and investors quickly dumped their Chinese holdings. This can obviously be a complete disaster that you would want to avoid in the future.
For this reason, it’s usually a good idea to know where an ICO has been established and what that country’s stance on cryptocurrencies as a whole is. Even if they have previously expressed no interest in placing restrictions on trading, owning or using cryptocurrencies, that could change if they have not yet taken a position.
The good news is that there are many countries that are very welcoming to digital currencies. These governments appreciate the fact that their citizens should be free to transact in any means that they please. Some of these entries are on the list because they don’t place any restrictions on these assets at all.
However, some of them are there because they place the correct restrictions. Ones that would punish exchanges and crowdsales looking to steal from their investors, but not ones which would put investor’s liberties at risk.
Australia has been a surprisingly friendly country to cryptocurrencies. They’ve even gone so far as to declare Bitcoin and other cryptos as legal tender, and they’ve eliminated the double taxation which Australian citizens would incur for spending their cryptocurrency on goods and services.
Since these individuals would already be paying the GST, the government found this unfair and changed it. Businesses and individuals are free to exchange goods and services for alternate currencies as they see fit, and there are no restrictions on them for doing so.
However, Australia is not without regulation entirely. They have issued guidelines for ICOs that wish to take up residence in the country and exchanges must be licensed if they want to operate there. For the most part, these are welcome guidelines.
ICOs will be relieved to have clear rules to follow and investors will be safer from scammers and unsavory projects out to steal their money. This country legitimized Bitcoin as early as 2013, much sooner than others, and it looks as if they will continue this positive trend in the future.
This country has become increasingly important in the cryptocurrency space. While other countries have become fearful of digital coins and tokens, Estonia has embraced those assets. They were even the first country to launch their own ICO.
Their openness to technology has allowed them to embrace many technologies that larger countries would never dream of attempting, such as their innovative e-residency initiative.
As far as cryptos go, they are largely unregulated in Estonia, and that makes this a very attractive European location for coin offerings. More and more exchanges are popping up here so as to allow their customers the financial privacy that they desire, and to operate without the headaches of other countries overreaching regulations.
It will be interesting to see what happens for Lithuania as far as cryptocurrencies are concerned in the future. Previously, this country was almost entirely unregulated for cryptos. They have recently launched their own guidelines for ICOs and exchanges thanks to the influx of blockchain businesses looking to set up shop in a place that will allow them to operate unmolested. The government of this nation has since had to come up with a plan, as it’s clear that many of these operations can not continue to go unchecked for the safety of their citizens.
Fortunately, the regulations are not overbearing and most ICOs want to comply with governments because they are a business. Businesses with a public face have a very hard time operating and servicing their customers if they don’t know what the laws are in regards to their operations. The Lithuanian government has made clear what will be expected, and as long as these demands remain fair, these companies will likely continue to operate here.
Cyprus has already recognized cryptocurrencies as legal tender as far back as 2014. Presently, cryptocurrencies are not subject to any regulations in the country, and that means its citizens can transact with them freely. If you’re an investor, then you’ll also be happy to know that this little country also imposes no taxes on cryptocurrencies gains. They actually do not tax securities at all, and since they have classified cryptos as securities, that means no taxes. That’s reason enough to love Cyprus, but there’s more.
ICOs are also largely unrestricted here, and that makes this a popular destination for new blockchain entities looking for more freedom. This is actually the highest rated entry on the list, and if you’re interested in seeing the details, then check out the ‘Countries’ section up top for a breakdown to see what makes Cyprus the top destination for blockchain!
This European nation is taking an interesting approach to attract blockchain companies. For a long time now, setting up a legal company in this sector has been a nightmare. France actually plans to attract ICOs by making that easy.
They will be setting up easy to follow guidelines that will make establishing a coin offering funded company easy to do, and they hope that will lure these companies in. It might just work. Being able to avoid any legal complications with a government in a major country that is willing to work with you is a good step towards making a stable launching ground for your business.
While there are other countries with more free business operations, they do pose one problem. Many unsavory companies will also be using these countries as a home base, and that puts anyone who uses them in the same group as far as investors are concerned.
This could soon turn into a red flag that turns off investors and these ICOs will want to avoid that at any cost. France has the potential to capitalize on this if they’re smart and are willing to embrace blockchain.
In closing, the battle between world governments and cryptocurrencies is just heating up. While many of these entities are unfortunately fearful of the power that they think crypto will take away from them, others are embracing these new technologies.
Smart countries will recognize that they can actually use this blockchain boon to bolster their own economies, and by helping these project organizers to create a reasonable legal framework for their businesses, everyone within their nation can benefit from it.
As an investor, the most important thing to take away here is to beware of countries who have not taken a side on cryptos. This is opening yourself up to the risk that they could react fearfully and either ban or heavily restrict currencies, sending your investment tumbling.
It can put your mind at ease to know how a country feels about the blockchain projects which are residing in their country. Nothing is set in stone, but this is just another item in your tool belt which you can use to make better investment decisions and to protect your capital from devastating news items.