Countries with positive regulation of cryptocurrencies (Crypto-friendly)


Countries with positive regulation of cryptocurrencies

This category can conventionally include all countries in which government agencies have already begun active work to determine the legal status of cryptocurrencies, or have already successfully completed such work.


Australia aims to become one of the centers of development of innovative blockchain technologies and is a favorable and progressive jurisdiction.
 Cryptocurrency in Australia is seen as one of the possible ways to make payments. Accordingly, cryptocurrency transactions are subject to standard taxation rules (corporate income tax and income tax), less Value Added Tax (VAT).

In August 2017, the Australian government introduced a bill to regulate cryptocurrencies in the state, but it is still under consideration by lawmakers. Moreover, the head of the Reserve Bank of Australia (RBA) Tony Richards said that the Central Bank sees no need for regulatory regulation of cryptocurrencies, as there are no visible problems in their circulation, and any attempts to regulate were called – useless.


The Argentine authorities are also very positive about cryptocurrency circulation in the country.  According to the legislation of Argentina, cryptocurrency is not a national currency, but can be considered as money. Digital currency can also be considered a commodity or a thing in the meaning of the Civil Code.In terms of taxation – transactions with cryptocurrency are subject to existing taxes, depending on the type of transaction with it. It is very important to pay attention to the fact that one of the main crypto-enthusiasts in the country is President MauricioMacri.


On December 22, 2017, Belarusian President Alexander Lukashenko turned Belarus into a progressive “crypto-valley” by signing the Decree on Digital Economy Development. This document describes in detail the issues related to taxation of cryptocurrency transactions, mining on different scales, the eligibility of individuals and legal entities in the field of cryptocurrency circulation, and so on. The decree itself should come into force on March 21, 2018.



Bulgarian state authorities currently equate cryptocurrencies with “hybrid currency,” which, accordingly, should be taxed according to the general principles of taxation in the state, but only if they are used as currency and in exchange transactions with/from fiat money. On the other hand, on
January 22, 2018, Bulgarian law enforcers searched the offices of Onecoin and a number of other firms that may be associated with it. The reason for the search is the suspicion of “creating a cryptocurrency pyramid.” The company’s directors and employees were also questioned, and many Onecoin servers and media were seized during the search. This fact shows that despite the loyal attitude to digital currencies in general, Bulgarian authorities actively monitor cryptocurrency activity in the state and will not allow its use for criminal purposes.


Currently in the UK, cryptocurrencies are not a specifically defined financial product, and therefore are outside the perimeter of legal regulation. In terms of their nature, cryptocurrencies are considered “private money. Transactions with cryptocurrencies are taxed depending on the type of transaction. The UK Ministry of Finance has also announced plans to bring cryptocurrencies under anti-money laundering and counter-terrorist financing laws, which would lead to an obligation to disclose the personal data of all market participants. In recent news, the UK Central Bank plans to introduce a cryptocurrency that would be directly linked to the pound sterling. With this, the regulator intends to overcome one of the most significant disadvantages of cryptocurrencies – the extreme degree of volatility.


For several years now, Venezuela has been in a deep economic crisis.  Uncontrolled inflation and unemployment have led to people trying to transfer their investments into assets that would be subject not to inflation but to deflation. Under such conditions, cryptocurrencies have become one of the most common ways for people to save their few savings. It is also interesting to note that President Nicolas Maduro initiated the creation of Venezuela’s cryptocurrency “El Petro” (to be launched in 2018), the creation of the General Directorate of Cryptocurrency and the introduction of procedures for state registration of miners in the country.


Since December 2013 and up to now, the Federal Financial Supervisory Authority has considered bitcoin in particular (and some other cryptocurrencies in general) as a unit of account, which in turn leads to the possibility of applying tax rules for “private money” However, so far, only transactions between individuals are legal. You can read more in our article of September 28.


The Gibraltar regulator (Financial Services Commission or GFSC for short) at the end of 2017 made an unprecedented decision, according to which all companies registered in Gibraltar and using blockchain technology in their work must undergo a compulsory licensing procedure. Also, since January 1, 2018, new requirements for the conduct of business by blockchain companies came into force. Now these companies must comply with the requirements of consumer protection legislation. Transactions with cryptocurrencies for individuals are not restricted.

Hong Kong

Hong Kong Monetary Authority (HongKongMonetaryAuthority) published an official statement back in 2013, according to which Bitcoin was equated to a virtual commodity and, accordingly, other cryptocurrencies have the same status.

It follows that operations with cryptocurrencies are not restricted and have no special regulation. The question remains open regarding the taxation of cryptocurrency transactions and cryptocurrency mining activities (mining). On the other hand, in 2014,
after another Bitcoin surge of more than 20 percent, Hong Kong’
s Secretary
 Financial Services and the Treasury issued an official statement urging citizens to refrain from investing in cryptocurrencies because they are highly volatile and highly speculative.

As for the ICO in Hong Kong, the conditions for this procedure in Hong Kong are less lenient. The regulator equates tokens with securities and, accordingly, requires strict compliance with all regulatory requirements of securities legislation.


In Georgia, there are no specialized normative acts that would regulate cryptocurrencies. However, the authorities are enthusiastic about blockchain technology and are actively trying to implement blockchain-related technologies in their work (for example, the country’s geocadastre is based on blockchain).  A free economic zone (FEZ) with preferential tax rates for businesses may also be attractive for miners.


The Danish Financial Supervisory Authority does not consider bitcoin and cryptocurrencies to be “regular” currencies, which means they are not subject to regulation by the authority. Transactions in cryptocurrencies are not restricted.


Chairman of the European Central Bank, Mario Draghi, in his comments and press releases repeatedly emphasized the attention of potential crypto-investors about the risks of investments/operations with cryptocurrencies.  Despite this, in December 2017, he also admitted that the cryptocurrency market already has such a huge impact that it is impossible to leave it out of sight. Other EU representatives are also of his opinion (in particular, Ewald Novotny, a member of the European Central Bank’s Board of Governors, believes that bitcoin transactions should be regulated and taxed).

Moreover, since December 15, 2017, the EU authorities approved a decision on mandatory identification of users of cryptocurrency exchanges. This decision was made as part of the implementation of the policy on combating money laundering and countering the financing of terrorism (hereinafter – AML/CFT).


In early 2017, the Israel Revenue Authority issued a statement equating cryptocurrencies with assets, but not with currencies, securities, etc.  Accordingly, cryptocurrency is considered an asset for accounting purposes, and capital gains taxes and VAT must be paid on it.  As of January 2017 – state authorities are preparing a bill that would regulate the use of cryptocurrencies in the country.


To date, there are no specialized legislative acts that would regulate operations with cryptocurrencies in the country. At the same time, the latter are not recognized as a legal tender or financial instrument. It is interesting to note the fact that government authorities in India have repeatedly stated the risks of investing in cryptocurrencies (although they do not prohibit any transactions with them), and the Indian Ministry of Finance compares cryptocurrencies to pyramid schemes. A few weeks after such statements were made, several cryptocurrency exchanges in India began to experience some problems with transactions. Delays in transactions began to reach two weeks. It should also be noted that as of January 4, 2018, the tax authorities of India began to conduct large-scale inspections of exchanges operating in the country in order to identify possible violations of tax laws. Moreover, the tax authorities began to investigate the activities of wealthy bitcoin entrepreneurs and enthusiasts. This policy could move India from the first to the second category, or even to the third.


Iran currently lacks specialized legislation that would define the legal status of cryptocurrencies in the state. However, the High Council of Cyber Technology (HighCouncilofCyberspace, NCC) has advocated the adoption of cryptocurrencies that would comply with the current legislation in Iran and would be available for control by representatives of the authorities. It is worth noting that at the moment, there are very few cryptocurrencies that would fall under the above criteria, as it contradicts the very concept of cryptocurrencies.


Moreover, the State Central Bank (CBI) is actively working on a whole package of regulatory documents that would act as a kind of foundation for the regulation of the cryptocurrency market. This work is expected to be completed as early as March 2019.  As of today, cryptocurrencies are actively mined, transferred, bought/sold in the country.


Back in 2014, the Spanish Parliament classified cryptocurrency as an electronic means of payment. Moreover, in 2016, Spanish authorities obliged cryptocurrency miners (miners) to undergo a special registration procedure and pay the appropriate taxes. Also, other draft laws were submitted to the Parliament, which were supposed to impose additional taxes on operations with cryptocurrencies, but they were not adopted. Cryptocurrency transactions are exempt from VAT.


Back in 2016, Canada began to actively study the features of innovative blockchain technology. At the same time, the Central Bank of Canada began to develop its own cryptocurrency called CADcoin.
 In turn, other government agencies are still conducting research on the cryptocurrency market to better understand it. Regulatory regulation will be carried out in full when the scale and popularity of cryptocurrencies will require
it.As of today, cryptocurrencies may fall under several taxes at once (depending on the type of transaction with them), namely:

  1. If there is a payment for goods or services – then such a transaction will be taxable as barter;
  2. when selling cryptocurrency (in the case of a tax base,) – is subject to income tax / income tax (for business entities) or tax on capital gains.


Remember that general AML/CFT requirements and KYC (know your customer) policies apply to all transactions.


The Central Bank of Kenya has repeatedly stated its somewhat cautious attitude to the cryptocurrency market, even at times comparing them to pyramid schemes. However, from a regulatory point of view, cryptocurrency transactions are not banned or prosecuted in any way, and other representatives of Kenyan authorities on the contrary say that they do not intend to limit the circulation of digital currencies, as they want to be “open to innovation”.


In April 2014, the Financial Industry Regulatory Commission issued a statement equating cryptocurrencies with conventional currencies. Accordingly, the authorities allow both individuals and legal entities to use cryptocurrencies for mutual settlements or other transactions. As for the operation of cryptocurrency exchangers or exchanges, the latter must obtain special permission from the state authorities to provide financial services.


In 2014, the Central Bank of Mexico, together with the Commission for the Protection of Users of Financial Services (CONDUSEFF), issued a press release through which they called cryptocurrencies highly speculative instruments and warned about the dangers of investing in them.  On the other hand, the Central Bank equated cryptocurrencies with commodities. In practice, the legal status of cryptocurrencies in Mexico is equal to the status of national currency (because cryptocurrency is subject to the same restrictions as cash).  As of today, authorities are developing a regulatory framework that would finally define the official status of cryptocurrencies in the region.

New Zealand

In New Zealand, the status of cryptocurrencies was originally equated to the status of virtual commodities. However, in October 2017, the regulator of New Zealand (FMA) issued an official press release on the legal regulation of cryptocurrencies.Now, the legal status of cryptocurrency transactions is identical to the status of securities transactions (i.e. identical). Moreover, unlike the regulator in other countries, such as the U.S., in New Zealand, cryptocurrencies are subject to securities law regulation in any case.


You can read more about the legislative innovations of the New Zealand authorities in an article dated November 24, 2017 on our website.


There is no detailed legal regulation. The position of the Norwegian regulator is quite interesting. It considers cryptocurrencies as a “financial asset”. And according to Norwegian law – financial assets are subject to property tax. For business purposes – bitcoin transactions are subject to sales tax.  In February 2017, the Norwegian government also announced that it would not charge VAT on transactions related to cryptocurrencies, which is consistent with established EU practice.

Isle of Man

There is limited legal regulation. There is even a specialized definition of “digital currencies” (under which cryptocurrencies fall).  Transactions in cryptocurrencies are restricted only for AML/CFT purposes (adopted in March 2015).

ICO projects are also required to comply with AML/CFT requirements, register with the Financial Supervision Commission (a license is not required) and comply with customer data protection requirements. The same rules apply to the activities of cryptocurrency exchanges.


 Poland also lacks detailed legal regulation of the cryptocurrency market. Back in 2013, the Polish Ministry of Finance made a statement that cryptocurrency is not illegal, but it is not a currency.   There is also no legal definition of cryptocurrencies. On the other hand, mining and activities to buy and sell bitcoins are officially recognized as one of the possible activities of companies. It is worth mentioning that such activities must be additionally registered with specialized state bodies.


In the U.S., there is limited legal regulation of the cryptocurrency market. Back in 2014, the U.S. Internal Revenue Service determined that for federal tax purposes, Bitcoin and cryptocurrencies were treated as property, with the appropriate tax rules (property gains tax) applied. True, these rules were easily circumvented by users through the use of the “exchange of similar assets” procedure, thanks to which cryptocurrency transactions were not subject to taxation.


But, since January 1, 2018, revolutionary changes to the U.S. tax law will come into force, according to which now the rule of “exchange of such assets” applies only to real estate, thereby closing this “loophole”. Now all transactions with cryptocurrencies will be subject to personal income tax or capital gains tax (depending on various variables).In turn, the SEC considers cryptocurrency “as a digital embodiment of value, which is distributed in digital form and can be used as a means of accounting, exchange, or accumulation.”


In some activities, such as the sale/exchange of cryptocurrencies, entities must adhere to AML/CFT and KYC regulations.The conduct of ICOs in the country, under certain conditions, may be subject to securities law regulation. As a consequence, when conducting ICOs, many initiators write that US citizens cannot take part in the procedure for buying and selling coins.

Saudi Arabia

According to the country’s authorities, the regulator does not plan to limit in any way the implementation of operations with cryptocurrency in the country, because the market is too small to affect the country’s economy.


The Senegalese authorities decided to learn from the positive experience of Tunisia and created a digital version of their national currency, the franc. The Senegalese franc ecosystem has since been converted to blockchain.  This cryptocurrency is maintained through the country’s Central Bank and eCurrency Mint.


In Singapore, there is an official definition of cryptocurrencies as a financial asset (one particular type of digital token that typically functions as a medium of exchange, unit of account or means of accumulation). Cryptocurrency transactions are subject to VAT.  The head of the Monetary Authority of Singapore, RaviMenon, said in October 2017 that the authorities do not intend to further regulate the cryptocurrency market. However, any attempts to evade AML/CFT rules by using cryptocurrencies will be stopped.

As for the ICO – in some cases, they must pass the registration of tokens in the MAS (Monetary Authority of Singapore), to obtain permission from the MAS and to meet a number of additional requirements. 

Existing cryptocurrency exchanges – must be licensed by MAS.


 Back in 2015, the National Bank of Slovakia stated that bitcoin does not have the necessary attributes of a currency, and therefore will not be regulated by the state.  Cryptocurrency transactions in the country are not banned or restricted in any way. Accordingly, there is limited legislative regulation in the country.


On December 23, 2013, the Ministry of Finance officially announced that digital currencies, such as Bitcoin, are not recognized by the authorities of the country either as a currency or as a financial asset. Only operations related to mining and exchange of cryptocurrency funds are taxed.


At the moment there is no legal regulation of cryptocurrency circulation, however, Taiwan authorities are actively working on the development of the necessary regulatory framework.  As long as these acts are in development, cryptocurrency circulation is not restricted in any way in the state. There is only one prohibition – on the installation of specialized bitcoin ATMs.

Conducting ICOs in Taiwan is also possible. Moreover, in October 2017, Taiwan authorities assured that they do not intend to ban ICOs.


Tunisia is a true “crypto-pioneer. In 2015, Tunisia became the first country to decide to convert the state electronic currency eDinar to blockchain.


Turkey is also very positive about regulation of cryptocurrencies in the country. Despite the fact that the country does not have a detailed legislative regulation of cryptocurrencies, according to the President of the Central Bank of Turkey, a specialized research group was established to monitor the cryptocurrency market and will develop an appropriate framework for the legal regulation of this issue. Now operations with cryptocurrency are not restricted in any way.  Moreover, in Turkey, for several years there are national exchangers, which work with cryptocurrencies.


In early 2017, the Central Bank of the Philippines began actively regulating the cryptocurrency market (despite previous statements about the risks and dangers of investing in cryptocurrencies). Cryptocurrency exchanges have been equated with money transfer companies, which in turn makes it mandatory for them to obtain a license. Exchanges must also generate specialized annual reports.

In early December 2017, the Central Bank also announced that it was working on the creation of a regulatory framework for ICOs. We should also note the fact that there are still unconfirmed rumors about the possible equation of cryptocurrencies to securities.


The status of cryptocurrencies has been defined in Finland. Cryptocurrencies are regarded in the country as a means of payment/financial instrument. Accordingly, cryptocurrencies are not subject to VAT.More detailed issues concerning taxation of transactions with cryptocurrencies are described in a specialized instruction, which was issued by the Finnish Tax Service. It states that two taxes are levied on operations with cryptocurrencies: tax on capital gains and tax on “wealth. As for the mining of cryptocurrencies, such activities are subject to taxation.


At the moment, the legal status of cryptocurrencies in France is not defined, which is very strange, because back in July 2014 an official press release was issued, which said that French authorities are aware of the significance and prospects of the cryptocurrency market, the opportunities and benefits that can give operations with them.  It was also said that in the near future drafts of regulatory documents will be presented, which will be aimed at regulating the taxation of cryptocurrency and operations with it in general.  To this day, this has not happened.


Given the fact that the current President of France, EmmanuelMacron, has a positive attitude to cryptocurrencies, it is possible that changes for the better.


Swiss regulator FINMA (Financial Market Supervisory Authority) in 2015 proposed to equate the legal status of cryptocurrencies in the state with foreign currencies. Thanks to this, transactions with cryptocurrencies are not subject to VAT, which corresponds to the existing EU practice.

Individuals can conduct operations with it without restrictions. However, some commercial activities (e.g. buying/selling cryptocurrencies on specialized trading portals) require a license. Moreover, when carrying out operations with cryptocurrencies, it is necessary to comply with the AML/CFT requirements applicable in the country.

In July 2017, in its official press release: the Swiss Federal Council announced the creation of a “regulatory sandbox” aimed at creating a favorable environment for financial technology startups.
 As for the legal regulation of ICOs in this jurisdiction, I recommend reading our article dated October 4, 2017.


The Swedish Financial Supervisory Authority (Finansinspektionen) has legalized cryptocurrencies as a possible means of payment in Sweden.

Licensing and AML/CFT requirements (including customer identification procedures) have been introduced for some companies (which interact with traditional currencies).

Transactions using cryptocurrencies in Sweden are not subject to VAT.
 In recent news, it is worth noting that in January 2018, the Central Bank of Sweden announced that it is considering a proposal to introduce its own cryptocurrency – the digital krone.


In South Africa, the South African Reserve Bank (SARB) regulates the cryptocurrency market. A special commission has been created to study this dynamic market and form official positions. However, at the time of writing – it has not yet made a statement.Despite this, in July 2017, SARB announced the beginning of cooperation with the blockchain startupBankymoon. At the moment, cryptocurrency transactions are not restricted in any way.

South Korea

South Korea is currently very active in developing rules for legalizing cryptocurrencies. In particular, there are proposals to amend the current Electronic Financial Transaction Act to create a framework for cryptocurrency transactions. The first result of this work was the introduction of a new requirement for mandatory identification of cryptocurrency traders. This decision was made to strengthen the fight against money laundering and terrorist financing;


As for ICOs in South Korea, further tightening of legal regulation is to be expected. In particular, analysts expect the creation of grounds for prosecution of campaign organizers who raise funds through the issue of securities using digital currencies.
Moreover, amendments to tax legislation are being actively drafted for the possible imposition of income tax, VAT, gift tax and capital tax on cryptocurrencies.

In recent news, the Korea Communications Commission (KCC) and the Ministry of Science and Information and Communication Technology announced joint inspections of companies and exchanges that conduct operations with cryptocurrency.


Legal regulation of cryptocurrencies in Japan began with a series of legislative acts passed in January 2017 to protect cryptocurrency market participants from possible bankruptcies of cryptocurrency exchanges. The reason for this beginning of regulation was the bankruptcy of one of the first and most famous exchanges MtGox back in 2014 and the negative consequences from which many players have not yet recovered. At the same time, AML/CFT and KYC requirements that apply to organizations involved in cryptocurrency transactions were legalized at the legislative level.

After, in April 2017, some cryptocurrencies (namely bitcoin and ether) were recognized as a possible means of payment. This move led to an increase in demand for cryptocurrency from investors and the beginning of the use of bitcoins as one of the payment methods in retail stores.
Cryptocurrency has generally been recognized as a negotiable value
rather than a means of money. It is important to remember that the concept of cryptocurrency is distinguished from the concept of electronic money. In terms of taxation – transactions with cryptocurrencies are not subject to VAT.