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The Currency Teenager: Why Germany and the United States are the Most Cryptocurrency-Friendly Countries

According to research by Coincub, the most crypto-friendly countries in the world have been revealed — Germany and the United States are tied for first place, but for very different reasons.

Germany: Progressive encryption legislation tops list

The study argues that Germany has “progressive” crypto legislation, as well as a large number of investors and Bitcoin nodes. The study also praised the European country's "favorable" tax regime, which means no capital gains will accrue as long as bitcoin and ethereum are held for more than a year. The report explains why this is such an important policy, adding: “As we have seen, a year is a long time in crypto affairs — but compared to the rules that apply to other assets in Germany, It represents a huge incentive, such as buying rental property, which has to be kept for 10 years to avoid tax."

Many countries have struggled to master crypto regulation, and the rapidly evolving nature of the industry means that central banks and governments often struggle to keep up. But Germany has tackled this challenge “head-on” with complex rules that also take into account block rewards and airdrops.

In addition, Germany also became the most cryptocurrency-friendly country in the first quarter of 2022. Germany rose from No. 4 in Q4 2021 to No. 1 in Q1 2022, beating former No. 1 Singapore. Increasing institutional adoption of cryptocurrencies, as well as the country’s progressive taxation for developing markets, are cited as reasons for its rise in the rankings. German institutions have embraced cryptocurrencies as a viable long-term investment for savers. This stance is reflected in the fact that a chain of traditional savings banks known as Sparkasse is currently working to provide users with crypto trading and custody services. The move means its 50 million clients will be able to trade and hold bitcoin at the institution.

It is worth mentioning that as early as 2019, the German Federal Government reviewed and approved and released the "German National Blockchain Strategy", which aims to take advantage of the opportunities brought by blockchain technology and tap its potential to promote the digital transformation of the economy and society. In recent years, Germany has actively embraced blockchain technology, accelerated its deployment in the blockchain field, attracted global talents and funds, promoted related technology and product research and development and industrial development, and further enhanced its international influence.

The "Strategy" specifies 44 action measures in 5 major areas. It is proposed to carry out blockchain financial innovation on the premise of ensuring financial stability. For example, opening up relevant German laws paves the way for "securities on the chain"; drafting a new bill to ensure that ICO activities are carried out in a regulatory environment; allowing exchanges to carry out legal currency and encrypted digital currency exchange business under the premise of obtaining a license.

United States: tied for first place in major developments

Fidelity is giving Americans the option to add bitcoin to their retirement funds. Workers can allocate up to 20% of their 401(k) in BTC, as long as their employers agree, which is seen as a major milestone, but some politicians are wary of whether the volatile asset will match pensions well. Funds have raised concerns.

Additionally, other factors that have helped the U.S. jump in the rankings include private demand for bitcoin trading and mining, and the large number of BTC nodes and ATMs across the country. When China began cracking down on mining operations, the US was widely seen as one of the main beneficiaries. The data shows that from July 1 to July 10, a total of 633 encrypted ATMs were installed in the United States, which is the country with the largest number of encrypted ATM installations, accounting for nearly 88% of the total encrypted ATM installations in the world.

A number of politicians, Cynthia Lummis and Kirsten Gillibrand, are trying to pass legislation that will help the digital asset industry thrive. President Joe Biden also signed an executive order establishing the first-ever comprehensive federal digital asset strategy for the United States.

The U.S. also shows positive data when it comes to crypto acceptance. Deloitte recently conducted a survey on digital assets among 2,000 senior managers of retail organizations in various industries across the United States. According to the survey results, more than 85% of the executives surveyed said that they attach great importance to "accepting cryptocurrency payments." Nearly 75% of respondents said they planned to accept payments in cryptocurrencies or stablecoins within the next two years. More than 50% of large retailers surveyed (with revenues of US$500 million and above) have invested more than US$1 million in services that "accept digital asset payments". Of the retailers already accepting digital asset payments, 93% said they had seen positive feedback from the move.

Other Country Mobility Factors: Legislation, Taxation and Regulation

The analysis noted that Singapore dropped one place to third, with regulators recently ordering the closure of all Bitcoin ATMs. Australia and Switzerland maintained their fourth and fifth positions. France, the Netherlands, Portugal, Canada and Hong Kong make up the remainder of the top 10.

It is worth noting that the news from the UK is very disappointing, the UK is in 12th place. The United Kingdom recently unveiled plans to become a global hub for crypto assets that would recognize stablecoins as a legitimate form of payment, but those ambitions have been overshadowed by the recent political drama that led to the resignation of Prime Minister Boris Johnson.

In addition, among countries that have fallen sharply in the rankings, Pakistan, South Korea, Belgium, Brazil and China have all experienced sharp declines. In addition, factors considered in this research analysis include government encryption policies, current legislation, taxation, the number of blockchain startups, and the development of central bank digital currencies.

The opinions in this article are for reference only and do not constitute investment advice. The currency circle fluctuates greatly, and investment needs to be rational.

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