Global Crypto-Friendly Nations Report

Crypto assets, encompassing a broad spectrum of digital and virtual assets, use cryptography and blockchain technology to secure financial transactions. Among these, cryptocurrencies such as Bitcoin and Ethereum have gained widespread adoption due to their decentralized and borderless nature. However, these same characteristics have attracted increased regulatory scrutiny from governments concerned about the potential misuse of these assets in criminal activities, including money laundering and terrorism financing.

The regulation of crypto assets has long been a topic of discussion, but recent events, including a series of bank failures linked to crypto activities and high-profile scandals like the Mt. Gox collapse in 2014 and the FTX bankruptcy in 2022, have underscored the need for robust security, transparency, and investor protection in the crypto market. These incidents have accelerated the demand for stringent accounting and reporting guidelines for crypto assets, as well as the implementation of comprehensive regulatory frameworks aimed at curbing criminal activities and enforcing Anti-Money Laundering/Counter-Financing of Terrorism (AML/CFT) and Know Your Customer (KYC) standards within the sector.

As investors increasingly seek favorable legal and tax environments for cryptocurrency investments, and as an unprecedented $84 trillion wealth transfer is anticipated from baby boomers to younger generations by 2045, the importance of principled investments and the demand for clearer regulations in the crypto markets are growing. Millennials and Gen Z, who are more inclined to invest in cryptocurrencies compared to older generations, also place high value on ethical and societal impacts in their financial decisions. Therefore, due diligence and enhanced regulatory clarity are essential to attract these investors and ensure sustainable growth in the crypto sector.

In this context, the Global Intelligence Unit at Global Citizen Solutions has developed the most comprehensive index and report, assessing the most crypto-friendly countries, across 75 jurisdictions, according to 13 key indicators, ranging from tax friendliness to green energy transition. This report leverages publicly available data and opinions from experts at GCS to provide an in-depth analysis of the global landscape for crypto assets, assessing crypto friendliness worldwide and revealing which regions have emerged as leaders in various aspects of crypto infrastructure, including adoption rates, cybersecurity, and internet speed. The findings highlight the regional differences in crypto infrastructure and regulatory environment and tax friendliness offering valuable insights for investors, consultants, clients and policymakers alike.

Bitcoin: Bitcoin is a decentralized digital currency introduced in 2009 by an anonymous individual or group known as Satoshi Nakamoto. As the first and most renowned cryptocurrency globally, it holds the highest market capitalization and remains the most valuable. Unlike traditional currencies issued by central banks, Bitcoin functions on a peer-to-peer (P2P) network, enabling users to send and receive payments directly without intermediaries.

Blockchain: Blockchain serves as the foundational technology for cryptocurrencies. As a form of distributed ledger technology (DLT), it is a database system that enables online transaction recording. Blockchain data is encrypted and managed in a decentralized, trustless manner.

Crypto Asset: Crypto assets are digital assets that leverage technologies like cryptography, distributed ledgers, consensus algorithms, and smart contracts to store value. Unlike traditional assets, crypto assets typically operate independently of central authorities, using distributed ledgers like blockchain, maintained by network participants.

Cryptocurrencies: Cryptocurrencies are the most well-known type of crypto asset, functioning as digital currencies used for transactions or as a store of value. In general, the security of cryptocurrencies is built on cryptography, neither by people nor on trust.

Decentralisation: Decentralized systems, a foundational aspect of cryptocurrency, do not rely on a single authority, eliminating any single point of failure. Instead, they operate without central control, distributing decision-making across the network.

Mining: Mining is the process by which cryptocurrencies generate new coins and verify transactions on the blockchain. In exchange for their computational efforts, miners receive new coins as rewards.

Stablecoin: Stablecoins are a type of cryptocurrency whose value is tied to an underlying asset, such as fiat currencies, other cryptocurrencies, or commodities. This characteristic aims to make stablecoins relatively stable against market fluctuations.

Token: a token refers to a digital asset created by projects built on top of existing blockchains. Unlike coins, which are native assets of their specific blockchains tokens operate on non-native blockchains.

The Global Crypto Friendly Countries Index is composed of 13 target-oriented indicators grouped into 5 thematic sub-indices, according to the chart below.

Data was meticulously sourced from highly regarded indices, including the 2023 Crypto Adoption Index from Chain Analysis, the National Cyber Security Index, the Energy Transition Index from the World Economic Forum, the Cost to Mine Bitcoin from Visual Capitalist, and the Chandler Economic Index for assessing the level of bureaucracy. These indicators were strategically chosen to provide a comprehensive and nuanced analysis of the factors most relevant to digital nomads, particularly those involved in the cryptocurrency space.

For the tax optimization indicator, we employed a normalization strategy where the higher tax percentages were adjusted on a “lower is better” basis to ensure accurate comparisons across jurisdictions. A similar methodology was applied to the availability of crypto exchanges, acknowledging the critical role these factors play in the overall crypto-friendliness of a country.

To facilitate an equitable comparison, all data points were standardized using the Min-Max Normalization formula, which rescaled each feature within a [0, 1] range. This process was essential to ensure that each indicator contributed proportionately to the final index, thus providing a balanced and objective evaluation across different countries. The structured and systematic approach underlying the Global Citizen Solutions Crypto Friendly Countries Index allows for a robust assessment of the best jurisdictions for crypto investors, capturing key aspects crucial for asset protection and investment benefits.

Global Intelligence Unit at Global Citizen Solutions has developed the most comprehensive index and report, assessing the most crypto-friendly countries. The report assesses 75 countries based on 13 key indicators—including regulatory environment, economics, tech and innovation, and green transition and governance — to determine the most progressive and advantageous environments for crypto investors.

The analysis reveals strong regional differences, with Europe emerging as a global hub for crypto-friendly policies, highlighting the continent’s progressive approach to cryptocurrency regulation and adoption.

Key take-aways:

• In 76% of the 75 selected jurisdictions, the use of crypto assets is legal. Conversely, 23% of the countries have imposed some form of cryptocurrency ban, either partial or total. As a result, individuals seeking to invest in these assets are often compelled to establish fiscal residency in more favorable jurisdictions to comply with crypto regulations.
• Among the top 20 countries with the highest populations of High-Net-Worth Individuals (HNWIs), approximately 15%, or 6,140,863 individuals, reside in nations that have implemented some form of cryptocurrency ban.
• Eight out of the top ten most crypto-friendly countries are located in Europe, highlighting the continent’s progressive approach to cryptocurrency regulation and adoption. These nations offer clear legal frameworks, strong support for blockchain innovation and favorable tax regimes, making Europe an important hub for crypto investors and businesses. Switzerland and Liechtenstein particularly are known for their favorable tax regimes regarding cryptocurrencies. In both countries, private individuals are generally exempt from capital gains tax on cryptocurrency trading.
• Singapore (2nd) and the UAE (10th) are rapidly enhancing their crypto ecosystems, particularly with extremely favorable tax regimes, imposing 0% taxes on crypto gains and robust support for blockchain innovation. Both countries have positioned themselves as global leaders in fostering a progressive environment for cryptocurrency adoption and investment.
• In Latin America, Chile, El Salvador, and Brazil are making significant strides in improving their legislation, exchange availability, and favorable tax regimes for crypto investors. Brazil is one of the countries with the most crypto investors in the world (6^th), Chile offers beneficial tax regimes for crypto investors, and El Salvador not only does not impose taxes on crypto gains but has made Bitcoin a legal tender within the country.
• Out of 75 countries that allow some form of investment in crypto (legal to use), 60 (80%) have investment migration programs. El Salvador stands out as the only country that accepts Bitcoin (legal tender) as an investment option in its immigration scheme, highlighting its pioneering approach in integrating cryptocurrency into national policies.
• Thirteen of the top 20 crypto-friendly countries also rank among the top 20 in the World Economic Forum’s Energy Transition Index. This alignment emphasises the importance of green energy for more sustainable crypto mining practices and highlights how a strong focus on energy transition can support the growth of eco-friendly crypto ecosystems.
• The United States stands out as one of the largest market for cryptocurrency use, driven by widespread adoption, robust exchange availability, and significant blockchain innovation. With a high level of crypto-related activity, it remains a leading global hub for both institutional and retail crypto investors. The country’s expansive infrastructure, access to technology, and strong regulatory frameworks make it a dominant force in the global crypto landscape.
• Together with the US, India, Vietnam, Nigeria, Kenya, and the Philippines have some of the highest crypto adoption rates, but this doesn’t automatically indicate a crypto-friendly environment. Adoption in these countries is often driven by economic necessity or limited financial alternatives, rather than supportive regulations. Truly crypto-friendly countries combine high adoption rates with clear legal frameworks, favorable tax policies, and government support for blockchain innovation. India, for instance, still needs to improve in areas like tax regimes, mining costs, bureaucracy, energy transition, and overall infrastructure to truly be considered crypto-friendly.