2017 has been an extraordinary year for cryptocurrencies. There has been a tremendous amount of growth in both value and popularity of cryptocurrencies, that no longer can it be referred to as just a passing trend. At the start of the year, Bitcoin traded at just under $1,000 — $960 to be precise. At the time of writing this article in December of 2017, the price of Bitcoin has peaked beyond the $20,000 mark. That is an increase in value that exceeds an entire magnitude of thousands, to the realm of tens of thousands in little under a year. Never before has there been any tradable commodity that has seen such growth.
All of the headlines this year haven’t been on Bitcoin though as Ethereum and many other Altcoins have experienced unparalleled growth as well. Cryptocurrency ICOs have become the leading crowdfunding method used by startups to raise capital for their projects. All around the globe, the conversation seems to be about cryptocurrencies, smart contracts, and blockchain-based applications.
With the level of growth that has occurred in the industry, greater attention is now being paid by governments and other stakeholders around the world. Considering the unprecedented volume of investment that has occurred in this year, steps have been taken to regulate the industry. Different countries around the world have adopted varying strategies to handle the market. This article will examine some of the countries that are approving cryptocurrencies. The order in which these countries appear does not indicate any form of ranking in terms of the disposition to cryptocurrencies.
Tokyo may no longer be considered as the commercial capital of Asia but the cryptocurrency hub of the region. With China and South Korea taking drastic measures against cryptocurrencies, Japan has been given the opportunity to become a breeding ground for the growth of cryptocurrency trading in Asia.
The Japanese government, through the PSA (Payment Services Act), has set up a framework that makes it legal to use cryptocurrencies for payment purposes. While China may have the monopoly on Bitcoin mining, Japan has the lion share of cryptocurrency trading/exchange activities as far as Asia is concerned. The FSA, which is the financial regulatory arm of the Japanese government, also recently approved a number of cryptocurrency exchanges, as well as cryptocurrencies which can be traded on these platforms.
With the support of the government, cryptocurrency operations are thriving in Japan, and in the coming years, many ICOs may even choose to host their campaigns in the country. By taking advantage of the reticence and ambivalence of many countries with regard to cryptocurrencies, Japan is positioning itself to become a major player in the market. With the industry still being in its infancy, there is a desire for friendly environments where the market can thrive. Government regulation isn’t necessarily a bad thing and the involvement of financial regulators in the Japanese crypto scene can give the much-needed incentive to entrepreneurs, developers, and investors to shift focus to the Japanese crypto market.
By the middle of 2016, the Canadian Central Bank was strongly dismissing the notion of developing its own cryptocurrency. Fast forward to August 2017 and the approval given to Impak Coin which becomes the first Canadian approved cryptocurrency. This says a lot about the evolution in the attitude of the Canadian government towards cryptocurrencies. With the government of their neighbors down south still a bit ambivalent on their position with regard to cryptocurrency, this move only strengthens Canada’s position as a force in the North American crypto scene.
On the whole, Canada is a friendly environment for cryptocurrency entrepreneurs as there are a number of Bitcoin startups in the country as well as numerous Bitcoin ATMs. Not many countries have more than one city that can be classified as a virtual currency hub but Canada has two: Toronto and Vancouver. Many countries can look to the successes of such initiatives and use them as a reference point in developing their own cryptocurrency hubs.
Following the success of Impak Coin, there are other cryptocurrencies that are reportedly undergoing testing and development. These cryptocoins are scheduled for release in the coming years and are a testament to Canada’s positive stance on virtual currencies.
Cryptocurrencies generally enjoy favorable Government policies in Europe as many nations on the continent are even massively involved in developing blockchain solutions. The UK and France, especially, are leaders in this regard. Germany is one of the few countries where Bitcoin is actually recognized as a legal currency.
There is a significant implication to this recognition of Bitcoin as being a legal currency in Germany. Many countries have not banned cryptocurrencies outright but have taken a not-so-positive stance against cryptocurrencies. Bitcoin being legal in Germany has had an impact on the value of Bitcoins due to the perceived legitimacy given to it by such Government recognition.
German tax laws are also favorable to Bitcoin with an exemption from the 25% tax on profits for Bitcoin that has been held for one year. The country is also home to one of the biggest Bitcoin marketplaces in the world, which has recently finalised plans to introduce Ethereum (the second most valuable cryptocurrency) trading into the platform.
There is a literal “Bitcoin City” in the country of Holland which is home to hundreds of cryptocurrency merchants. This Bitcoin City is located in Arnhem and it is possible to make retail purchases at shops and cafes with Bitcoin.
There is no government regulation on Bitcoin and other cryptocurrencies in Holland. Many cryptocurrency startups are based in Holland as a result.
The existence of such crypto hubs creates a possibility for the evolution and advancement of the crypto economy. There are many bugs that have to be worked out before crypto coins can become a mainstream currency and have such infrastructures as a Bitcoin City helps to improve the functionality of the concept. Within the Bitcoin City in Arnhem, Bitcoin is just like Euros, or Dollars, or any other fiat currency — a store of value. When people engage in economic interaction using Bitcoins, a consciousness is created within the general public that cryptocurrencies can function just like regular fiat money.
The attitude of countries usually falls under three categories: favorable, undecided and unfavorable. The fact remains that cryptocurrencies continue to be at the forefront of the modern day technological advancement and many countries are taking a long hard look at blockchain technology and its possible applications.
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