Top Crypto Friendly (and Hostile) Countries

Blockchain is the technology that makes bitcoin function. But bitcoin and other cryptocurrencies are only one application for blockchain technology.

In fact, they might not be the most important one.

Right now, the Australian Securities Exchange is preparing to convert its trading systems to use blockchain technology. And companies as diverse as automated legal systems and healthcare record keepers are using initial coin offerings (ICOs) to raise money.

Believe it or not, the International Monetary Fund itself is exploring using blockchain technology for its own trading of special drawing rights.

A thousand other uses are sprouting all around the world. Not to mention the existing vast bitcoin mining operations.

Click on this interactive map to explore the main cryptocurrency players, both pro and against.

 It’s an enormous boom in dozens of ways, many of which you haven’t heard of yet.

But blockchain and its cryptocurrencies are becoming a victim of their own success.

Governments are catching up. They’re deciding whether to back, adopt or undermine the new technologies.

Which countries are the backers, adopters and underminers of blockchain and cryptocurrencies?

As you’ll discover in this report, every nation is taking a different approach.

From arresting bitcoin owners before even making cryptocurrencies illegal, to launching their very own cryptocurrency, the world’s governments are serving up everything under the sun.

If you want to know the future of blockchain and cryptocurrencies, you need to know who’s who around the world of blockchain nations.

You should also get your hands on Sam Volkering’s book Crypto Revolution, where he explains everything, right down to how to set up a wallet and buy your first bitcoin.

Blockchain backers

These nations are supporting blockchain, or keeping out of the way.

We’re not sure which is a better option if you want to entice the blockchain revolution on your soil. But the benefits of embracing blockchain are emerging fast.


A view of Upper Rock and Alameda Wildlife Conservation Park in Gibraltar

Whether you consider Gibraltar an independent country or just a British overseas territory is irrelevant. The point is that Gibraltar, famous for its low tax, was the first government in the world to set up a legal framework for blockchain technology back in May 2017.

Recently, the opening of an exchange, Gibraltar Blockchain Exchange, the Crypto Harbour project and the hosting of a Blockchain Summit are placing Gibraltar as one of the most attractive places to watch for developments in blockchain technology.


The Portuguese have been giving the rest of the world a few lessons in good government policy these last few years. They decided to fight against drug trafficking and stigmatised addiction by de-penalising drugs. And guess what, drug consumption went down. They stopped the austerity measures dictated by Brussels, and the economy soared.

Now, Portugal announced that profits from cryptocurrencies will be tax-exempted. Considering its previous successes, this looks like another sharp political decision. A few more like these and we’ll have to lose the “P” of the “PIIGS”.

Arnhem, the Netherlands - August 8, 2013: People sitting on a terrace in the inner city of Arnhem. Around the square are several shops, the square is called Jansplaats. In the background a statue of Karel (1467-1538), Duke of Gelre and Count of Zutphen between 1492 and his death.Netherlands

The Dutch certainly aren’t afraid of controversy. If their acceptance of cannabis and prostitution wasn’t enough, now they have a “Bitcoin City”.

That’s the nickname the city of Arnhem has earned since it started promoting the acceptance of bitcoin in main street retail stores. They even have a travel agency focused on “bitcoin tourism”. The map of bitcoin accepting shops is now a real clutter.

As the Dutch government has no regulation on digital currencies, many cryptocurrency startups are choosing the Netherlands as their operational base.


Surprisingly enough, the Germans have taken a very straightforward approach to bitcoin: they declared it legal tender.

That’s great backing for the currency, whose holders benefit from a low-tax regime for cryptos. With Germany on board, it seems clear that the European Union will struggle to differ.

With the euro under pressure from Italy, legalising cryptocurrencies might signal the end of the euro in the most unexpected way. But that’s another story.


The Canadian central bank went from being totally against cryptocurrencies to favouring them in the space of just one year.

By August 2017, impak Coin received legal approval, becoming the first legal crowdsale of a cryptocurrency on the American continent.

Canada also hosts two “virtual currency hubs” in Vancouver and Toronto, making it better positioned that its southern neighbour in the crypto-race.


Traditionally business-friendly and pro-privacy, Switzerland is already leading the way in ICOs, with some of the biggest operations hosted there.

At the moment, the Swiss government is working with the industry to set up a legal framework to keep ahead of other competitors, like Gibraltar.

United Kingdom

In keeping with its status as the financial capital of the world, Britain went all-in on ICOs in 2017. Over $3 billion was raised by companies in this way last year.

The City of London is home to a rapidly growing herd of cryptocurrency and blockchain startups.

But it is not all good news. Our beloved central banker Mark Carney is calling for a crackdown on cryptocurrency mania.

Although it’s entertaining seeing people who don’t understand this new technology crying out and pestering about it, this represents a big risk for London. It could lose our good starting position as a place to innovate, grow and raise funds.

Remember, the whole point of bitcoin is to evade central bank manipulation out of our wealth, so Carney’s position is no surprise.

South Korea

South Korea is considered a blockchain supporter because of its tech-mad citizens and in spite of its government’s best efforts.

South Koreans are crazy about cryptocurrencies. Thousands of cafes and restaurants accept payments in digital currency. There’s a great deal of alarm among the older generations, as many youngsters are dropping studies to focus full-time on trading cryptos. The government responded with a series of crypto-crackdown measures.

In January, the website CoinMarketCap, one of the main sources of real-time information about crypto prices, stopped adding Korean exchanges to its price calculations. Their higher prices and premiums were skewing the real price in the rest of the world.

It’s not all good news for South Korean crypto fanaticism. Some government officers were caught insider trading. They were allegedly publishing negative announcements to make the prices drop, and then places buy orders before announcing positive news.

In any case, if you’re trading cryptos, you better watch the Korean peninsula. And not only the south…

North Korea’s hacking operations have stolen millions of pounds in bitcoin over the last few years. The mysterious Lazarus Group is one major culprit. Thanks to the nature of bitcoin, its ill-gotten gains are easy to move around the globe, despite sanctions on the North Korean financial system.


The most technological society on the planet is a big fan of bitcoin. This shouldn’t be a surprise for anybody, as the mysterious creator of bitcoin calls himself Satoshi Nakamoto.

After crackdowns in China and South Korea, Japan has emerged as the friendliest Asian country for blockchain. Some of the big cryptos, like the New Economy Movement and its token NEM, are Japanese.

Japan’s government has already set up a framework that allows cryptos to be used for payments, leading the way in the trading activities of exchanges in Asia. However, the cryptocurrencies are not technically legal tender.

Japanese cryptocurrency exchanges have been at the centre of several scandals. The collapse of Mt. Gox and the security breach at Coincheck are two of the biggest crises bitcoin has had to face. They highlighted that, even if bitcoin is secure, the institutions that allow you to gain access are not.

The rest of the world

Governments who chose not to interfere in blockchain or cryptocurrencies are potential ideal places for these innovations to boom. There are many other countries that could have made the list above under this classification.

They also come with a variety of other features that blockchain and crypto benefit from. For example, their low regulations on finance (UAE, Cyprus, Panama, or any other offshore tax haven) or for the general interest of their citizens in the crypto world (Australia, Denmark, Sweden).

The US remains a big mystery here. It has just recently turned positive towards crypto. But we are also seeing some cracking down on ICOs, with a large number of subpoenas issued in March 2018.

Then there’s the fact that Donald Trump is at the wheel, so you never know what’s coming.

Blockchain adopters

Some nations aren’t content watching blockchain boom. They want in on the action themselves. On the one hand, governments could ruin the benefits. On the other, they might support the boom. Who knows what the outcome will be among these blockchain adopters.


Blockchain is just the latest digital technology that Estonia’s government is leading the world on. It’s pushed the boundaries of e-gov further than anyone, attempting to make the nation run paperless.

On blockchain too, the e-country earns the top ranking on its merits. The number of ICOs per inhabitants is higher there than anywhere else.


The city-island-state is hosting many ICOs, exchanges and some of the top cryptocurrencies by market cap. Some of them, like DigixDAO and its tokenised gold, could become serious rivals to bitcoin. Singapore’s stable legal sector, international mindset and low tax status have encouraged vast amounts of innovation.


Russia isn’t usually seen a supporter of pro free-trade decentralised technology. But it is in this case.

Vladimir Putin has been a fan of Ethereum for a while. He even had an interview with its founder, Vitalik Buterin.

Although Russia’s central bank has sent mixed messages about the ruble being the only legal tender in Russia, it’s also flirting with the idea of launching a crypto-ruble itself.

This would have a massive geopolitical impact, as it would be a way of potentially circumventing Western sanctions on Russia. Bitcoin is already being used in that way, so the Russian government is interested.

In the meantime, Russia’s biggest lenders have developed Masterchain, a blockchain ledger to process transactions faster. This blockchain has the support of big names like Sberbank, so we can take it seriously.

Recently, the founders of Telegram, also Russians, began conducting the biggest ICO ever, aiming for a market cap of over $2 billion.


This tiny island in the Indian Ocean is aiming to become a global leader in blockchain by partnering with ConsenSys.

Their ambitious plan is to implement blockchain in every aspect of the island ecosystem, from digital identity to property ownership and free Wi-Fi access. The idea is that the operation of blockchain technology is much more cost-efficient and secure than what the government could otherwise provide.

Maybe this remote country, famous for surfing and sharks, will be at the centre of the financial revolution.


Australia’s stock exchange is currently implementing a trading system that uses blockchain technology. All trades, ownership records and much more will soon be blockchain based.

On the cryptocurrency side of things, Australia has a rather bizarre tax loophole like the Germans. As long as you spend your cryptocurrency, as opposed to selling it, the capital gain is tax-free. With plenty of bitcoin accepting merchants around the country, it’s possible for Aussie investors to bank their gains tax-free! At least for now…


The micronation of Liberland hasn’t had much success getting international recognition. And its land remains a no-man’s land stuck between Serbia and Croatia. But outside its own territory, the country’s backers have been very busy.

One of their main initiatives is to support the likes of bitcoin, blockchain and any other forms of technology. They all synch perfectly with Liberland’s image as a decentralised and free state.

Recently, the president announced his intention to launch a national Liberland cryptocurrency called “Merit”.

The underminers

Not all nations are blockchain friendly. They especially despise the cryptocurrency application that blockchain has made possible. It undermines their monopoly over money by providing an effective alternative outside their control.

As you’ll discover, the more tightly a government controls the economy, the more it stands to lose from the likes of bitcoin. But the more its citizens stand to gain too.

These nations are testing some of blockchain’s key questions: is it really as safe, secret and efficient as the creators claim? Will the crackdowns be effective? Let’s find out…


Prohibitive sign with a bitcoin inside on a Chinese flag 3D illustrationChina is to cryptos what the UK was to the Industrial Revolution. The difference is that this time the Luddites are in charge and the man on the street is adopting the new technology.

There are huge amounts of capital being diverted into cryptos by ordinary Chinese people. They lack confidence in the currency and want to evade strict capital controls. Keeping some of your wealth outside the Chinese financial system is a good idea if you want to send money internationally or keep it safe.

The Chinese government has already provoked a few booms and busts in the crypto market. They tend to take step towards prohibition, only to repent a few months later and become more flexible again.

Nonetheless, the latest crackdown on ICOs looks like it will be persistent for a while, which has made several startups move to friendlier countries, like Japan or Singapore.

For now, the Middle Kingdom is still home to massive bitcoin mining farms, where most of the bitcoin in the world is extracted. Subsidised electricity makes it a particularly cheap place to mine.

China is at a crossroad. On the one hand, such an oppressive regime can’t bear the idea of privatising money and losing control of the currency. On the other, it might miss the cryptocurrency train altogether, which will leave it behind. Cryptocurrencies don’t go well with communism or state control.


When a big part of your country’s congress is occupied by members of two communist parties, one Maoist and one Leninist, you can guess that financial freedom is off the table.

Nepal has been cracking down on crypto-related websites, and arresting individual investors and holders of bitcoin.

Remarkably, Nepal didn’t have any regulation around cryptocurrencies whatsoever at the time the police officers began arresting bitcoin owners.

The worry is that other nations are watching crackdowns in Nepal and the effect they have. What might they learn?


Another “progressive” thinking country is Bolivia. The government there has been arresting bitcoin miners and traders since May 2017. According to the authorities, dealing with any currency other than the official one is illegal and hence can be prosecuted.

The head of Bolivia’s Financial System Supervision Authority even called for a witch-hunt, asking the population to “denounce cases” of virtual currency investing.

The root problem in Bolivia is that its political elite shows zero understanding of what cryptocurrencies are, and what they could become. They treat them all as a Ponzi scheme, and call on the population to “not be fooled by the scammers”.


Morocco is one of the latest countries to awaken to the crypto revolution… on the wrong foot.

Just days after one Moroccan internet service provider announced that it will accept payments in bitcoin, the Moroccan central bank banned bitcoin and other digital currencies. This kind of statement shows how little attention the key minds of the country have been paying to cryptos, because they’re banning assets as different as Ethereum and Nano.


Venezuela is probably on every list of basket-case countries, from inflation to living standards. And because of this, cryptocurrencies have found a natural home there.

Thousands of people in the country are using cryptocurrencies to buy basic goods and services.

The crypto news site CCN quotes one Venezuelan who reckons bitcoin works just fine, day to day. In fact, it has to. “This is not a matter of politics. This is a matter of survival,” he said.

He claims to have bought two plane tickets to Colombia, paid for his wife’s medication, and even paid his employees with bitcoin in the past month alone! Meanwhile, other Venezuelans queue at ATMs to withdraw a few pennies’ worth of local currency – the maximum allowed.

Another issue is related to the amount of electricity being used in the country to mine bitcoin. Due to the subsidisation of the energy consumption, many bitcoin miners have chosen to operate in Venezuela as this massively increases their profits. But the Bolivarian government had an ace up its sleeve.

Against the libertarian decentralised spirit of cryptos, the Venezuelan government has developed an estate-backed cryptocurrency, el Petro, backed by barrels of oil and the bolivar. This is a desperate attempt to fool the financial markets and somehow escape the pitiful shape of its economy.


The case of Bulgaria illustrates the threat to cryptocurrencies in three ways.

First, it centres around Ruja Ignatova, the most famous Bulgarian scammer of all time.

After launching OneCoin, a cryptocurrency/private blockchain/Ponzi scheme, and getting her office building in Sofia raided under German orders, she escaped Bulgaria and her current status is covered by layers of fake news and disinformation.

Some rumour that she was arrested in Germany and somehow was left at large. Locals in the tourist city of Sozopol say that she’s building a massive $2.5 million mansion, where she regularly docks her $15 million yacht.

So the national experience with cryptocurrencies hasn’t been very good. And the government responded. It confiscated over 200,000 bitcoins last May in an operation “against organised crime”. This is the second biggest “theft” of bitcoin, after the infamous Mt. Gox in 2014.

In early December, when bitcoin reached its all-time high price, those bitcoin would’ve been worth more than $4 billion. That means that Bulgaria could have paid off a quarter of its national debt with the click of a mouse.

Word on the street is that the Bulgarian national debt started decreasing sharply from June 2017, and is now at its lowest since 2009. But official numbers haven’t been confirmed yet.

In December, Bulgarian bankers moved together to close all the accounts that were used by crypto exchanges within the country, leaving thousands of investors with their funds “kidnapped”.

Between them, scammers, the government and the bankers have completely trashed cryptocurrencies in Bulgaria.

North Korea

North Korean flag and Bitcoin Flag waving over blue sky

The accusations against North Korea seem endless. The Hermit Kingdom is under suspicion of having hacked South Korean exchanges, forced the company Youbit into bankruptcy and stolen 11,000 bitcoin worth… well, whatever price it is when you read this.

Recently, the Japanese exchange Coincheck was also hacked, with an estimated $530 million lost to the attackers.

This shouldn’t be surprising given the allegations of North Korea’s state-backed hacking division attacking the central bank of Bangladesh in 2015.

Although the isolated country gives the impression of being against cryptos, in reality it faces a golden opportunity to circumvent international sanctions and a backdoor to participate in the global financial markets, which are not really accessible from Pyongyang.

It is also thought that North Korea is massively mining Ethereum and other altcoins, which should be very profitable because the government has the electricity, facilities and manpower required to do so. Not to mention, the gains are tax-free.

Now we have yet another reason to watch North Korea’s activities, as if intercontinental missiles weren’t enough.

A race to the bottom

There are many other countries that are taking the same restrictive measures mentioned above. Kyrgyzstan, Bangladesh, Vietnam, Thailand, Colombia… all of them share in common the backward vision of a non-connected world in which they can put up borders to technological progress.

When they awake to reality, their societies will be in disadvantage against the crypto-friendly countries.

But their crackdowns do answer many important questions.

Does blockchain need or care about governments? Cryptocurrencies are supposed to be about operating outside of the law, but with ironclad security.

The irony is that it’s the governments which crack down on cryptocurrencies which create the demand for them. Places like Venezuela, China and Zimbabwe are so unstable or so overregulated that people turn to cryptocurrencies as a way out.

Will their crackdowns be successful in the end, or will they only encourage cryptocurrencies even more?

We’ll have to find out the hard way.


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Capital & Conflict is published by Southbank Investment Research Limited.


Category: Investing in Bitcoin

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