Countries lead blockchain adoption for various reasons, including recognizing its potential to transform multiple sectors of the economy, promoting innovation and economic growth, and creating a favorable regulatory environment to attract blockchain businesses.
Types of blockchain communities that lead blockchain adoption
Blockchain communities refer to groups of individuals, organizations and companies involved in developing and using blockchain technology. These communities form to share knowledge, collaborate on projects and advance the adoption of blockchain technology.
There are different types of blockchain communities, including:
Developer communities: These groups of blockchain developers work together to create protocols, programs, smart contracts and other blockchain-based projects.Industry communities: Communities developed around specific industries or sectors, such as banking, healthcare and supply chain management, are known as industry communities. Members of these communities work together to create blockchain solutions that can handle the particular problems faced by their respective sectors.User communities: Individuals that use blockchain-based goods or services make up these communities. They exchange information and offer feedback to enhance the usability and functionality of blockchain goods.Investment communities: These groups have grown around blockchain-based ventures like cryptocurrency or startups that use the technology. Members of these communities engage in due diligence projects, exchanging knowledge and views about potential investment opportunities.Social impact communities: These groups are focused on leveraging blockchain technology to solve problems in the social and environmental spheres. Members of these communities work together to develop blockchain solutions that could create a more just and sustainable world.
Countries leading blockchain adoption
Blockchain technology can potentially boost numerous industries’ productivity, security, and transparency, reducing costs and enhancing customer experiences. Therefore, countries are investing in developing and using blockchain technology to address different societal and economic concerns.
El Salvador
El Salvador has emerged as a global pioneer in adopting blockchain technology after becoming the first nation to recognize Bitcoin as a legal tender. In June 2021, El Salvador’s government established a law recognizing Bitcoin as a legitimate payment method for goods and services alongside the U.S. dollar, the nation’s legal currency. Through this effort, the government aimed to prioritize financial inclusion in the country, where 70% of adults do not have a bank account.
The acceptance of Bitcoin (BTC) might make El Salvador a desirable location for international investors, a benefit mentioned by the country’s president, Nayib Bukele. To encourage the widespread adoption of Bitcoin, the government implemented several actions. The $150 million trust fund in the state development bank — Banco de Desarrollo de El Salvador — was approved by the legislature’s finance commission in August 2021. It was created to allow the automatic conversion of Bitcoin to the U.S. dollar, facilitating easy exchange between the two currencies for Salvadorans.
The nation debuted its Chivo (slang for “cool”) wallet in September 2021. Each wallet contained $30 in BTC. The government has established a network of crypto automated teller machines (ATMs) in El Salvador and 50 other U.S. cities, making sending money to their families easier.
In 2022, the crypto market crash affected the price of Bitcoin badly, raising concern for the Central American country that had invested so much in the cryptocurrency. However, Bukele showed no apprehension and, on the contrary, pledged to a dollar-cost average purchase of one BTC per day to confirm continued and full support for the digital asset.
Related: What is dollar-cost averaging (DCA), and how does it work?
In January 2023, El Salvador enacted the Digital Asset Issuance Law, establishing the parameters for a “Volcano Bond”— bonds backed by Bitcoin.
Portugal
Portugal has proactively created a favorable environment for blockchain and cryptocurrency startups. The nation has actively used blockchain technology in public services, healthcare and supply chain management. The Blockchain Panorama platform — which intends to encourage information exchange and cooperation among participants in the blockchain business — was introduced by the Portuguese government in 2019.
Since then, Bitcoiners and crypto enthusiasts have flocked to the region, attracted by a pro-crypto environment offering the chance to use BTC in real life — paying bills and taxes with the cryptocurrency. Merchants’ adoption has also increased, with Spanish startup BitBase working on bringing more Bitcoin ATMs and stores to major cities.
In 2021, the Portuguese government approved a decree establishing the basic conditions for the creation of technological free zones (ZLTs) to promote tech-based innovation. It includes helping the implementation of blockchain technologies through experimentation and testing.
Since then, the country has started adopting more stringent regulations on crypto taxes to follow other European countries’ legislation. In 2022, the government announced the reversal of a long-standing tax law that excluded crypto gains based on the assumption that they are not legal tender.
Singapore
Singapore is a leading country in blockchain adoption, with the government investing heavily in blockchain research and development. Due to its favorable regulatory climate, Singapore has become a hotspot for initial coin offerings (ICOs), with many blockchain businesses choosing to incorporate there.
The country’s financial regulatory body, the Monetary Authority of Singapore (MAS), is leading the country’s development of governance structures, technical standards and infrastructure to encourage blockchain and cryptocurrency adoption. Its primary role is to monitor and mitigate the crypto industry risks without hindering technological innovation.
In 2021, the crypto exchange Independent Reserve conducted a survey across all demographics of Singaporeans, revealing that 43% owned crypto. In 2022, a new survey by the same company highlighted that the population’s interest, trust and confidence in the future of cryptocurrency and blockchain was very high, with 58% of the population interviewed perceiving Bitcoin as an investment asset and a store of value.
Malta
Along with Singapore, Malta started to promote blockchain adoption as early as 2017, when it gained a reputation as the “blockchain island” after drafting some industry regulations to speed the growth of blockchain technology. In 2018, the Maltese parliament passed three laws providing a regulatory framework for blockchain and digital currencies to regulate ICOs, digital assets, digital currencies and related services.
Concerning the taxation of crypto assets, Malta specified that electronic money and utility tokens are not listed as capital assets in the Income Tax Act, excluding them from capital gains tax. In contrast, securities and virtual finance assets are considered capital assets and subject to taxation.
At the end of 2021, the Maltese government included blockchain and artificial intelligence (AI) within their commercial guide prospect and framework to commit to promoting the tech. The aim is to incentivize international companies to establish in Malta for testing and operating blockchain technology.
Malta hasn’t achieved “blockchain island” status yet. Consistent and increased international scrutiny over the island’s domestic political and economic events led its leaders to pursue more conservative policies toward the industry than those previously promoted.
However, many blockchain and crypto-focused businesses are thriving. For example, companies utilizing blockchain in the supply chain of products, like wine and olive oil, are a tangible reality on the island.
Related: How blockchain technology is used in supply chain management?
United Arab Emirates (UAE)
In April 2018, the UAE government launched the Emirates Blockchain Strategy 2021 to become a smart region, with government services and private businesses powered by blockchain for more efficiency.
The region has always had a reputation for being the hotspot for digital innovation, and blockchain allows the government and businesses to save time, money and effort while allowing people to use a transparent and decentralized system. The UAE government is pushing for policies that welcome innovation in the metaverse and nonfungible token (NFT) marketplaces.
Related: Cryptocurrency regulation in the UAE and the Dubai Virtual Assets Law
The remaining emirates forming the UAE are aligning with Dubai and Abu Dhabi in implementing initiatives and regulations to promote blockchain and crypto businesses in the region. In February 2023, the Ras Al Khaimah (RAK) emirate announced the creation of the first free economic zone fully dedicated to virtual assets and digital companies, dubbed the RAK Digital Assets Oasis or RAK DAO.
Other countries
The digital asset market — blockchain and cryptocurrency primarily — is growing worldwide. Neglecting some other regions that have become industry hotspots for innovation and investments would be unfair. Here are other top countries where adoption has grown massively in the last couple of years, encouraged by a crypto-friendly approach.
USA
The United States is home to the most extensive crypto ATM network. It is the highest contributor to the Bitcoin hash rate, implying that blockchain and crypto adoption is thriving in the country. While there is yet to be a consistent legal approach at the state or federal level, the government is trying to develop a more precise crypto regulatory framework to encourage adoption and investments.
Switzerland
With the city of Lugano aiming to become the cryptocurrency capital of Europe, Switzerland is one of the most exciting countries to watch in the blockchain space. The small European country welcomed blockchain and crypto payments as early as 2016, with a pro-crypto regulatory framework encouraging businesses to settle and invest in the area.
South Korea
South Korea has experienced a growing interest in blockchain and cryptocurrency, becoming a significant player in adoption in Asia. The country has taken a proactive but cautious approach to digital assets regulation to ensure the safe operation of the market for both consumers and entrepreneurs. Thorough attention is given to Anti-Money Laundering and combating the financing of terrorism laws to ensure market transparency and security.
Japan
Japan has always been at the forefront of Bitcoin and blockchain adoption since many Japanese were mining Bitcoin even when the cryptocurrency had little value. The first and most prominent Bitcoin exchange was Japanese-based Mt. Gox until it was hacked and halted operations.
The failure of Mt. Gox inspired the government to take measures to protect consumers while maintaining a leading role in the world’s cryptocurrency market. In 2022, the Japanese government awarded seven mayors with NFTs for their achievements, granting more official status to the technology and encouraging its adoption.
Nigeria
A Google Trend data analysis revealed that the adoption of blockchain and cryptocurrency had experienced a clear uptrend in Nigeria, especially after the 2022 crypto market crisis when the country emerged as one of the most crypto-curious nations. It also appeared among the top countries with a high global crypto adoption index, according to a report by crypto data analysis company Chainalysis.
The Nigerian population faces an uncertain domestic situation, with high inflation and depreciation of the country’s fiat currency fueling an acceleration in the adoption of digital assets. The government seeks to implement a fair regulatory framework to protect consumers while encouraging innovation. In October 2021, the Central Bank of Nigeria launched the eNaira, a blockchain-based central bank digital currency (CBDC) pegged to the country’s national currency, the naira. Nigeria is one of the very few countries to fully roll out a CBDC to the population, alongside the Bahamas and Jamaica.
Source: https://cointelegraph.com/news/5-countries-leading-the-blockchain-adoption
