Cryptocurrency’s most vocal advocates are adamant that cryptocurrencies can and will replace fiat currencies. But there is one crucial advantage that conventional markets have over the cryptocurrency markets. Namely that the fiat financial market is subject to strong global regulations. These regulations make trading currencies and assets across borders simple.
One of the most important lessons for new traders to learn is that cryptocurrency regulations vary wildly around the world. When you read any guide to cryptocurrency trading for beginners, you should be mindful of the fact that local laws in your area may also apply, especially where taxes are concerned.
Japan is usually more at ease with new technologies than other nations and cryptocurrencies are no exception. Japan currently attracts around 10% of all the cryptocurrency trading traffic flowing through the internet right now. This traffic is due primarily to the country’s progressive attitude towards crypto.
Since 2017, Japan has recognised cryptocurrencies as legal property. Recognition has enabled Japan to tax cryptocurrencies in a clear and relatively straightforward way. The national tax authorities were initially reluctant, but Japan is reaping the rewards now. There are still many nations when cryptocurrency trades remain untaxed.
Switzerland is another nation that is known for its pragmatism. The canton of Zug has earned the moniker ‘Crypto Valley’ thanks to a series of local laws passed that have regulated crypto trading and attracted numerous related businesses.
The Swiss railway system is also one of the few in the world that supports cryptocurrency as a payment option. You can use Bitcoin to pay for tickets across the network. There is also a growing list of Swiss banks that enable the deposit and transfer of cryptocurrencies.
The city-state of Singapore is unusual in several ways. The country is beautiful. The people there have embraced a kind of benign authoritarianism that doesn’t exist anywhere else. It might be Singapore’s unique structure that has enabled it to implement crypto regulations with such ease.
Singapore treats cryptocurrencies as assets, not currencies. Any business that operates using cryptocurrencies pays a 7% tax on them. Singapore also has specific regulations for cryptocurrency payment services.
Luxembourg is a tiny nation with a reputation for offering tax perks to residents and non-residents alike. Luxembourg treats cryptocurrencies as if they are ‘intangible assets.’ This classification means that cryptocurrency transactions are not subject to VAT and that there is no need to pay income tax until you dispose of the assets.
Cryptocurrencies have been gaining in popularity over the last decade or so for several reasons. At first, few understood what cryptocurrencies were. They only knew that some people were able to make a lot of money from them. As time has gone on, people have collectively begun to understand cryptocurrencies a lot better. Part of the reason that it is so hard for a newcomer to get to grips with cryptocurrency trading is that the rules and regulations vary around the world.
The nations we have identified above seem to be the most friendly to crypto traders so far. However, make sure you check before you commit yourself.