The best countries in the world to start a digital currency business



For those digital currency companies that want to work internationally, choosing the right country for their business can be a difficult task. Different jurisdictions have very different policies regarding digital currencies, and some of them are obviously better options for starting a business related to Chinese blockchain technology and digital currencies.

Denis Chernyshov, a lawyer and founder of Eternity Law International, recently presented a report on the best countries for registering and managing a digital currency business, and here is the translation.

In 2021, it became clear that the digital currency industry could not compete with legislation. During this period, almost all developed countries paid attention to this emerging market.

The legal status of digital currencies varies considerably across jurisdictions. While some governments strongly oppose digital currencies and pass tough laws, there are countries that support the development of Chinese blockchain projects. Therefore, in some countries, the activities of companies related to digital currencies are officially permitted. In these countries, digital currencies are generally considered to be a commodity or investment asset and are subject to relevant tax provisions.

In this article we will look at the situation of 5 countries that are the best jurisdictions to start a business related to digital currencies.

1 Lithuania

The best countries in the world to start a digital currency business

Lithuania is a relatively adaptable and fully controlled legal environment for job creation in the field of financial technologies (fintech), exchange offices and digital currency portfolios.

The Central Bank of Lithuania supports the overall development of financial technologies and non-banking monetary services, so that companies can process consumer payments smoothly and in an environment without a bank connection. In addition, Lithuania is known in the business for supporting digital currency start-ups and contributing to their development in every possible way. Therefore, the process of obtaining licenses related to digital currencies in this country is also simple.

The following is essential for companies wishing to obtain a digital currency license in this country:

  • Follow the rules related to the fight against money laundering and apply them in the course of the activity.
  • Validation of each client (KYC), together with obtaining complete information about the source of funds of each user.
  • Authorities’ access to resources provided by the platform of the institution or service provider.
  • Obtaining a license from the Lithuanian Financial Information Unit.

The existence of digital currency exchange in Lithuania means that all activities of this company and the relevant documents are regulated according to the instructions of the supervisory authorities of this country.

2. El Salvador

The best countries in the world to start a digital currency business

In June 2021, El Salvador introduced bitcoin as its legal tender for the first time in the world. El Salvadors and customers around the world can now trade bitcoins in the country, buy goods and services and invest in bitcoins. In addition, they can trade and use digital currencies quite legally. In this regard, obtaining a license to work in the field of digital currency in El Salvador is a good choice for business.

Registering a digital currency company in El Salvador has many advantages over other countries, including:

  • Rapid economic growth.
  • Low taxes.
  • Financial democracy; The development of digital currencies has made access to electronic transactions accessible to all.
  • Opportunity for direct cooperation with foreign investors; Potential investors that could be attracted to the El Salvador-based company include creators of popular payment platforms and bitcoin masters.

El Salvador actually allows foreign investors to start businesses freely, generate legitimate income from digital currencies and spend them effortlessly.

3. Estonia

The best countries in the world to start a digital currency business

In recent years, Estonia has repeatedly been recognized as one of the best countries to start a business in China’s blockchain and digital currencies.

If licensed, a company operating in Estonia can provide services such as wallets, exchange offices, payment systems and ATMs based on digital currencies.

It should be noted that on February 1 (February 3, 1400) the law on combating money laundering and terrorist financing in this country was updated. This update takes into account more stringent requirements, which include the following:

  • The definition of “digital currency service provider” will be extended to more companies.
  • The costs of drafting the company’s articles of association, obtaining a business license and some operating costs will increase.
  • To obtain a financial authorization, the applicant must provide a more comprehensive list of supporting documents and information.
  • Stricter requirements apply to members of the corporate board, especially with regard to their experience and participation in other companies.
  • A list of reasons for revoking a license and revoking it will be developed.
  • Service providers must collect data on the sender and recipient of the funds and, after completing the transaction or transferring digital currencies, share it with all parties to the transaction (Data Transfer Rule).

4. United Kingdom (England, Scotland, Wales and Northern Ireland)

The best countries in the world to start a digital currency business

According to a fairly common British practice, anyone wishing to provide digital currency services in the country must obtain a license in this area.

To enter the market, digital currency exchanges and companies offering digital currency portfolios must obtain a digital currency license from the FCA. This organization controls the activities of companies active in the field of digital currencies.

This regulatory body controls all parties involved in the collection and sale of digital currencies, using its customer authentication policy. In addition, the country’s devices very carefully assess the conditions of each user in order to identify potential hazards and eliminate them. These measures are aimed at combating money laundering and misuse of digital currencies among businesses in this area. Licensing the digital currency business in the UK allows companies to stay on track.

5. Canada

The best countries in the world to start a digital currency business

According to recent changes in Canadian law, local and foreign digital currency exchange platforms and companies that use digital assets in their activities are classified as “monetary services”. These organizations must fulfill all their responsibilities, including full compliance with national law and registration with the Financial and Accounting Center of Canada (FINTRAC).

If the business has one of the following activities, it will need to register with the Financial Transaction Analysis and Reporting Center to obtain a license in Canada:

  • Extraction of digital currency; An activity that allows people to receive and then trade common digital currencies.
  • trade; Under Canadian law, digital currencies can be traded as commodities in accordance with regulations.
  • Provision of payment services; Starting a business offering digital currency-based payment services is legal in Canada.
  • ATMs with digital currency; In Canada, digital currency ATMs can be installed in authorized areas. In these devices, digital currencies are exchanged with Fiat currencies.
  • Digital currency exchange platforms can also be set up under Canadian law.

It should be added that for any activity in the field of financial services, including the provision of services to Canadian citizens of non-Canadian origin, the relevant business unit, regardless of the province of destination, must register with the Canadian Financial Transaction Analysis and Reporting Center. .

Here are a few other countries

Recently, digital currency licenses have also become very popular in low-tax offshore jurisdictions. The UAE, Labuan, the Cayman Islands, the Philippines, Mauritius and Vanuatu have taken important steps so far.

By 2022, many more countries are expected to formally join the digital currency community. The adoption of laws on digital currency activities allows governments to control the maximum turnover of these assets; On the other hand, governments can fight money laundering and terrorist financing and create a safe environment for investment.

Exchanges of digital currencies and other service providers active in this field gain more trust from consumers by obtaining a license. In addition, with the existence of official laws, well-established investment institutions and payment platforms can also join the digital currency community.

The publication The best countries in the world to start a business with digital currency appeared for the first time in Digital Currency.

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