Gone are the times when crypto was just another buzzword or urban legend! It's now a worldview, a future orientation, and the most surefire strategy to combat centralized financial control in the present.
The adoption of cryptocurrency differs per country. Many countries either lagged, tried to limit how far crypto adoption may go, or saw the promise of crypto far sooner and plunged headfirst.
Those that plunged headfirst into the bottomless crypto ocean have gone to great lengths to bring Bitcoin and other cryptocurrencies to their borders.
These countries are primarily motivated by lowering taxes and creating favorable legal regulations for enterprises that use Blockchain, the underlying technology of Bitcoin, and its altcoins.
Additionally, more governments are growing open to the idea of a new industry and its benefits, resulting in greater regulation for cryptocurrencies as both assets and utilities.
Countries Creating an Environment for Crypto Growth
Most start-ups want to use blockchain as infrastructure, so governments in some countries develop better rules to encourage them. But it’s not only for businesses, the average Joe, too, can profit from an increased blockchain adoption rate. Citizens and corporations of these countries benefit the most:
In August 2021, Germany passed a law allowing institutional funds to hold up to 20% of their assets in crypto.
The law allows fixed-income investment funds (Spezialfonds) to invest up to 20% of their assets in Bitcoin and other cryptocurrencies. However, these funds are only accessible to institutional investors as pension funds and insurers.
On December 13th, 2021, Sparkasse (German Savings Banks Association) announced that in 2022, it might offer its customers a crypto wallet through which they will be able to invest in major digital currencies like Bitcoin (BTC) and Ether (ETH) directly from their checking accounts.
As a result, Commerzbank and Volks- und Raiffeisenbanken announced plans to offer similar services, potentially allowing the vast majority of Germany's banking market to access cryptocurrency.
Could this lead to the next crypto rally? A decade ago, PayPal was allowed to tap directly into the existing banking infrastructure and what has followed was nothing short of a great success story: Within a few years, PayPal managed to grow from a multi million dollar to a multi billion dollar company. Will we see a similar rise in crypto adoption? Only time will tell, but the signs point into the right direction.
As a result, it's no accident that Germany has emerged as one of the world's most crypto-friendly countries, thanks to its concerted efforts to support blockchain-based businesses. For instance, they granted the German branch of Coinbase a crypto custody business license by the Federal Financial Supervisory Authority earlier this year. Also, over 20 crypto exchange-traded products are listed on Deutsche Boerse's digital exchange, Xetra.
The Maltese government has already taken legal measures to firmly establish the island's status as "the Blockchain island”, despite banks having yet to follow suit. Notwithstanding this, the island remains an attractive location for many Blockchain firms.
This is also the first country where a decentralized bank and stock market have already established themselves. As a result, Maltese banks appear to be a little more accepting of cryptocurrency. Despite this, they have remained cautious and do not provide the same level of support for crypto enterprises as they do for other businesses in their regular course of business.
The Malta AI & Blockchain Summit is one of the most important yearly crypto events. In terms of blockchain and new technology, it is Europe's and the world's most important event, with over 80 countries represented.
Malta is also one of the few EU countries that do not charge a property tax to investors interested in purchasing real estate. However, "Global residents" who are not liable to Maltese Money Tax on income generated outside Malta are subject to a business tax of 35%, as long as they do not deposit it in a Maltese Bank Account. If they do deposit this money in Malta though, then the government only taxes it at 15%.
The people of El Salvador have big hopes for the future!
As of September 2021, it is the first country to use Bitcoin as its official currency. Moreover, the government has set up bitcoin ATMs, an e-wallet, and elegant stores to facilitate this development.
The government gave citizens who signed up for its national digital wallet, known as "Chivo" or "cool" US$30 in free bitcoins as a further incentive. And wait for it… a foreign investor who puts up three bitcoins (≈$140,000 as of writing) in the country is eligible for residency!
El Salvador's President Nayib Bukele declared in November that the country plans to construct the world's first "Bitcoin City" within the next couple of years, funded by bitcoin-backed bonds. According to President Bukele, the city will include an airport, residential, business zones, and a central plaza that resembles a bitcoin symbol on an aerial view.
The government will issue the first bitcoin-backed bonds on the "liquid network", which is a bitcoin sidechain network, in 2022. When 10 of these bonds worth $5 billion are issued, the total amount of bitcoin will be taken off the market for five years. El Salvador intends to sell some of these bitcoins used to fund the bond once it has been locked up for five years to reward investors with an "additional coupon."
In El Salvador, a securities law is being created, and Bitfinex would be granted the first license to run the exchange.
Crypto's Future in Financial Markets
Real-world adoption is the leading driving factor for any cryptocurrency bull market. Cryptocurrency is gaining more credibility as more publicly traded corporations allocate it to their portfolios.
For instance, an S&P 500 company, Tesla, turned $1.5 billion of its reserves into Bitcoin. Following suit, two significant investment players — Fidelity and WisdomTree — also applied for a Bitcoin ETF (exchange-traded funds).
Even better, artists are generating seven-figure sums from non-fungible tokens (NFT) as NFT collectors invest hundreds of millions, all thanks to crypto.
Cryptocurrency is the future of the financial markets because of the following:
● In a decentralized market, lower costs of transactions are experienced because of the removal of exchange intermediaries; users can trade, lend, and borrow easily. One of the best ways to lend your crypto out and receive interest is via Cake DeFi’s Lending product.
● Crypto simplifies the process for creators by providing the needed infrastructure to create and trade their ‘art,’ be it games, music, systems, or NFTs.
● The fully transparent and permissionless decentralized financial system is replicating, improving, and ultimately democratizing complex and sophisticated financial processes at an incredible pace. For example DeFiChain –– a blockchain dedicated towards decentralized finance applications –– just launched it’s decentralized asset trading feature, bringing traditional stock trading closer to the blockchain.
● It fairly distributes the rewards across all participants in the system.
● The advent of cryptocurrencies has made it feasible for enterprises to obtain millions of dollars in just a few hours by launching an ICO for a new token, making venture capital (VC) investment easier.
Several countries have decided to accept the risk of using cryptocurrencies, in addition to those indicated above. Given that this is only the beginning of the crypto experience, we hope their initiative will lead to broader crypto adoption.
With that said, many countries are still attempting to grasp this innovative form of currency, and things could change dramatically from where they are now.
Crypto is here to stay, and it is not too late to become involved. You can join the cryptocurrency bandwagon and get the endless rewards of investing, trading, and creating on the blockchain.
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