After months of intensive research, the Coincub Global Crypto Ranking is out for Q1 2022. Here’s our tl:dr of the most relevant developments:
- The most crypto-friendly country in the world for Q1 2022 is Germany. The groundbreaking decision to make crypto investments part of its huge domestic savings industry signals institutional acceptance at a high level and a bright future for crypto in Germany.
- Singapore, formerly ranked first, dropped to second place due to government decisions to restrict crypto services advertising by Virtual Asset Service Providers (VASPs) outside of their websites and a clampdown on Bitcoin ATMs.
- The USA takes third place, but ranks first in domestic mining.
- Move over El Salvador – The Canton City of Lugano now recognizes Bitcoin, Tether, and Lugano’s own LVGA Points token as legal tender, netting Switzerland 5th place in Q1 2022.
- China took last place in the Q1 2022 ranking following its widespread ban on trading and mining crypto; a massive blow to the global hashrate.
- The UAE has made its ranking debut in 26th place. The federation is trying to make up for lost time with an ambitious plan to become one of the world’s crypto hotspots, issuing clear guidelines for ICOs. Once the UAE develops a clearer tax framework it could be a major contender for the top spot.
- Hungary has the most advantageous crypto tax regime, with a flat-rate tax on crypto gains of just 15% applicable only when crypto is converted to flat currency.
- Cyprus, Nigeria, Malta, and El Salvador round out the top five countries with the most favorable tax rates after that
- Crypto analysis platform Coincub and artist collective PLEIX are releasing a charitable NFT collection – stay tuned for more updates.
Want more details? Keep reading for the full Q1 2022 Coincub Crypto Ranking.
Who’s top, who’s not – and who’s in between!
It’s been a sensational last three months in the world of cryptocurrency as countries change, adapt, and accommodate their positions towards the phenomenon. Each quarter, the Coincub looks to reflect these changes by classifying and categorizing the changes within each country and publishing them in crypto country rankings. In the last quarter of 2021, our ranking showed Singapore on top with one of the most dynamic crypto economies anywhere but subsequently, Germany has nudged it aside and now sits at number one.
But there have been other significant movements over the last three months too. In Q1 2022, The Netherlands, France, and Spain have risen up to seven, eight, and 16 respectively, thanks to strong all-around crypto ranking criteria including high volumes of crypto transactions. They also have strong scores for the number of blockchain start-up companies in their economies – the sign of a very vibrant blockchain-tech community – and all feature increasingly positive regulation to safeguard the interests of crypto consumers.
Most interestingly of all, Switzerland, rising up eight positions to number five even has its independent Canton City of Lugano now openly recognizing Bitcoin as legal tender. Lugano is adopting cryptocurrency as a means for payment of taxes, goods, and services, as part of a new collaboration with the provider of the Tether (USDT) stable coin. Having two such apparently opposite economies as El Salvador and Lugano holding this position widens the crypto debate and provides something akin to AB testing. Another strong crypto performer, Hong Kong, also rises powerfully to number six from a low spot of 35 last year in part due to the proliferation of crypto-based courses at leading learning institutions, high numbers of Bitcoin nodes, and the proliferation of blockchain-based organizations.
Mid-table risers include Denmark and Romania as their governments begin taking a more positive stance on the need for clearer and more up to date crypto legislation. Interestingly, Hungary, which dropped from 18 to 28 has initiated a sweeping new crypto taxation flat rate of 15% on crypto gains – with no threshold on earnings. Such a move is seen by the government as the means to increase the tax take and reduce tax avoidance among citizens and may catapult the country upwards in forthcoming rankings – at present Hungary hits our top five as one of the lowest crypto tax locations worldwide.
Into the list is a new entry, the UAE, coming in at number 22. The UAE had previously taken a hard line against crypto with bans in place on trading but in the last few years has begun a complete turnaround and is now looking to make up lost ground with an ambitious plan to become one of the world’s crypto hotspots and financial centers. India, on the other hand, has huge popular enthusiasm for crypto and a booming blockchain community, moving it up to number 19, but suffers from an indecisive government policy and lack of direction. This may be about to change with long-awaited legislation, however.
The largest band of mid-ranking performers comprises 22 countries all closely linked together with scores of between 20 points to 30 points. This band shows no geographical characteristics but is made up of a global spread of countries ranging from Sweden, Greece, Turkey, Israel, and Malta, to Vietnam, El Salvador, Nigeria, Taiwan, South Africa, and the Philippines. Whilst some of these countries constantly make headline news, Malta, Nigeria, and El Salvador for example, their all-around scores show a lack of development in their crypto and blockchain economies.
Despite all the movements, one thing is for certain, Q4’s biggest faller, China, is still rooted at the bottom following its widespread ban on trading and mining crypto.
|Country||Rank Q1 2022||Gov Regulation||Financial Services||Population||Taxation||Talent||Proliferation||Trading||Fraud||Environmental|
|United Kingdom||11 Up||5||10||1||-5||2||17||5||-3||2|
|South Korea||21 Up||8||6||1||-2||1||11||3||-3||3|
|South Africa||27 Down||6||6||1||-4||0||11||4||-1||3|
|El Salvador||36 Down||8||6||0||-4||0||5||5||0||0|
|New Zealand||39 Up||7||8||1||-4||0||7||2||-2||0|
Coincub selects some of the most popular crypto topics and offers you the ‘top five’ countries in our ranking findings. Read them below
Top five most crypto-friendly countries
Germany’s steady rise up the Coincub rankings sees it supplant Singapore as the world’s most crypto-friendly country in Q1 2022. The top five countries in the 46 country ranking are Germany
, Singapore, United States, Australia, and Switzerland, followed by a re-emerging Hong Kong at number six.
Germany takes a positive stance on cryptocurrency trading and investment. It moved up 3 places from 2021 to take the top spot. Germany is already one of the world’s most crypto-friendly countries. The country also has the highest number of Bitcoin nodes besides the US, but with a smaller population and GDP demonstrating an even greater commitment to crypto. There have been several positive developments over the last few months. The Federal Financial Supervisory Authority issued a crypto custody business license for Coinbase’s German arm earlier this year. German stock market operator Deutsche Boerse has also listed more than 20 crypto exchange-traded products on its digital exchange, Xetra. The Sparkasse savings bank looking into offering wallets to trade crypto is a huge step for institutional acceptance.
Singapore was number one on the Q4 ranking with its progressive crypto economy, but a few things have changed with the Monetary Authority of Singapore (MAS) hitting the brakes by issuing firm guidelines that Virtual Asset Service Providers (VASPs) should not be allowed to advertise their services outside of their own websites and thus restricting the use of Bitcoin ATMs. Singapore, however, remains a crypto and blockchain powerhouse, but at the moment moves down to number two.
America and Australia hold steady
The US, much like Australia, views clearer crypto regulation – rather than prohibition – as the best approach for reducing risk. Over 27 million Americans own crypto – a sign of how enthusiastic the country is. The Coincub ranking accounts for GDP and population to get a more accurate reflection of a given country’s crypto economy. In pure numbers, America leads the way in many categories, but overall, as a crypto economy, remains at number three.
Australia maintains its top five ranking spot. The country has many factors in its favor, particularly the possibility of a retail central bank digital currency (CBDC). The number of crypto users in Australia continues to grow, more than doubling over the previous year. Australia’s lawmakers may implement a licensing framework for digital exchanges, allowing the purchase, holding, and sale of crypto assets by consumers in a regulated environment.
Switzerland moves up three spots to become a top five member in Q1 2022. Reasons include its openness to cryptocurrencies and technological innovation. New laws regulating crypto asset trading to offer investor security also boost the country’s rank. Recent steps forward include the addition of Ether to BBVA Switzerland’s cryptoasset service. The investment portfolio widens the scope for private banking clients and investors. It is now the first mainstream bank in Europe to offer Ether and Bitcoin as part of its service. Demand for crypto investment services is high in Switzerland, and it has worked steadily towards legislation that provides support to the crypto economy, right in time for Lugano to declare Bitcoin legal tender. The crypto race is heating up.
Top five countries with the most advantageous tax regimes
Many misconceptions regarding cryptocurrency tax make headlines around the world.
In many supposedly low or no tax countries, gains can still fall under standard income tax. In others, tax can still be assessed if the recipient is a professional trader, and yet again, in some others, taxes can be assessed on a case-by-case basis. Then there’s the question of whether tax is on the capital gains of your crypto holdings, or the income – or how long you hold it for. Much also depends on whether you are a resident or Non-Dom, in countries such as Portugal or Malta for example.
- Hungary – currently the country has introduced the provision of a flat-rate tax on crypto gains of just 15% – applicable only when your crypto is converted to flat currency – reckoning that it will reduce tax avoidance (or negligent reporting) and increase the tax take for the government. We put this top because there is no threshold on your gains – it’s a flat rate.
- Cyprus – the ugly truth is that you can still pay taxes on your crypto gains in sunny Cyprus but they come under standard income tax at a rate of 12.5%. As a Non-Dom, you may be able to form a so-called ‘Dividend Company’ that will enable you to pay zero tax but that’s another matter.
- Nigeria – another country often quoted as having no crypto tax that does actually tax you. There may be no specific crypto tax guidelines, but your gains, when converted to flat, will be taxed at standard income rates – but this is still a highly attractive 20%.
- Malta – always crops up, but the country has a complicated tax system for high rolling crypto traders. This makes it a haven for professional investors who find ways to mitigate the prevailing business income tax of 35% down to somewhere between 5% and, er, zero. How? You tell us.
- El Salvador – As a foreign investor in El Salvador – and obviously to attract you there – it was officially stated by El Salvador’s President that any profits you accrue from Bitcoin will not be taxed. That’s no tax on either your crypto’s capital increase or on the income from it. Yippee, book that flight now! Will it last? Who knows?
Top five bitcoin mining countries
Mining is the old-fashioned word for the very high-tech business of verifying the validity of Bitcoin transactions – or blocks of transactions. There is an upper limit of 21 million Bitcoins that can ever exist. Not all of them have been ‘mined’ as yet, so there’s still a lot to play for.
Mining has a bad press because of the vast quantities of electricity needed to feed those hard-working computers. There are varied schemes around the world to supply the required electricity, even, in the case of El Salvador, tapping into the heat of a happily obliging volcano.
NB: China was formerly the world’s leading Bitcoin mining country by volume before its comprehensive ban on all things crypto last year. The top place is now taken by the USA with 35% of world mining totals.
Top five bitcoin mining countries per GDP
Mining volumes only tell half the story. In the Coincub rankings, we use each country’s mining percentage of world totals in relation to its GDP (both for the same year). This gives a truer picture of a country’s commitment to mining in relation to its economy.
In this case, the top five miners offer some interesting perspectives, particularly with the USA losing its preeminent spot.
- Kazakhstan – has a whopping 18.10% of world mining totals, which is already enormous purely in world totals. However, taking that percentage in relation to Kazakhstan’s GDP for the same year and the figure becomes an unassailable 93.29 points – way above any other country.
- Iceland – comes second with a score of 15.70. At the time of writing, Iceland is a mining trailblazer powered by its cheap and sustainable geothermal and hydroelectric power. Whether it stays that way (as other industries want to use that lovely power for other activities) remains to be seen. As of now, it gives those miners something to do on those cold, dark nights.
- Malaysia – comes in at number three for the size of its mining economy. Mining is not illegal in Malaysia, but the country has had huge problems with the theft of electricity to power the activities, even though electricity is plentiful and relatively cheap.
- Ireland – Ireland remains a major Bitcoin mining location with a substantial 4.68% of world mining totals – making it a high world miner just on volumes. In relation to the country’s GDP of $516b – and despite controversy over the power needed – Ireland’s score of 9.07 puts it in fourth place just above Russia.
- Russia – has significant mining figures – 11.23% of the world total, but how it is powered is yet again fiercely controversial. In relation to GDP, Russia’s score of 6.82, puts it firmly in the top five with the next highest miner, Paraguay, some 2 points off at 4.8
Top Five Crypto Risers In Q1 2022
Coincub.com rankings reflect significant changes in legislation, price, and popular demand for crypto developments across the world. Outright bans can drop a country rapidly down, and steady and positive legislation can move countries upwards. Much legislation and regulation around the world centers on anti-money laundering laws, anti-terrorism funding, certification of crypto exchanges, and taxes. Countries that offer clearer taxation guidelines – even if taxation is high – can make crypto trading more accessible and safer than those countries, such as India where tax policy is uncertain. Even Denmark struggles with an outdated taxation policy which inhibits crypto development and causes confusion. Those countries that begin to embark upon more crypto-focused legislation can also move up from low positions in our earlier rankings.
- Hong Kong 29 places to number 6. Hong Kong, previously a high performer in previous rankings, dropped dramatically in Q4 because of continuing uncertainty over China’s decision to ban crypto activity outright. The province bounces back as no ban has yet happened while retaining high scores as a leading crypto and blockchain hub.
- Russia 22 places to number 20. Russia has vacillated over cryptocurrencies, from banning the use of cryptocurrency for purchasing products or services (at least inside Russia) to allowing trading and mining. The invasion has changed everything, of course, but in our Q1, the country is still a mining leader with 11.23% of world totals, along with high numbers of bitcoin nodes, blockchain-related organizations, and crypto ownership by population.
- Spain 14 places to number 16. Spain is a keen crypto advocate with strong all-round scores in many categories including numbers of Bitcoin ATMs and blockchain organizations – many of which are engaged in environmentally-related projects. New laws which clarify the position of Virtual Assets Services Providers, making trading more secure, move the country up – despite highish taxes.
- The Netherlands 13 places to number 7. The Netherlands has a highly motivated crypto economy and its financial institutions are very open to crypto trading and spending. The country has one of the highest scores in our rankings for Bitcoin Nodes, along with high scores for the number of ICO startups. A definite crypto contender.
- Romania 11 places to number 26. Romania comes in at number 5 thanks to its fast-developing blockchain community and high scores for numbers of ICOs, Blockchain-related organizations, and Bitcoin nodes. Romanian citizens have a very positive outlook toward cryptocurrency, and the country also has high scores for online crypto searches. A number of homegrown crypto exchanges even provide crypto trading linked to the Romanian Leu. Romania moves up from 11 places and could go further later in the year.
The Coincub ranking continues to evolve. The rankings take into account quantitative figures such as crypto trading or mining volumes, as well as qualitative findings like the latest government legislation and the institutional stance of central banks and financial sectors.
We continue to find that purely quantitative numbers don’t always point to the most progressive countries – in under-developed countries, popular demand for cryptocurrency often isn’t matched by government or institutional enthusiasm. The Coincub ranking attempts to look beyond pure numbers to find those countries that are positioning themselves strategically.
In this regard, a wider analysis of criteria such as government strategy, institutional acceptance, and legislation – along with quantitative data points – offers a more consolidated view of a county’s ambitions.
The ranking we used is based on points scoring and accumulation. Scores for government regulation can reach +9 points if all categories are positive – but reduce to -4 points if the legislation is negative. One example of negative regulation is China where a total ban on crypto is currently in place.
The ranking has nine overall categories and 21 sub-categories, ranging from numbers of recognized crypto education courses to startups. All of these categories are point-scoring, the totals of which are added together to comprise our rankings list. This latest ranking for Q1 2022 includes 44 of the most active crypto economies worldwide – although this number may increase going forward. For this current ranking, a number of new categories have been added, such as crypto education courses and initial coin offerings. Going forward we expect more countries and categories to be added in order to make our ranking as comprehensive and wide-ranging as possible.
Below are the point-scoring categories, the totals of which ultimately make up the Coincub rankings.
Vision for the ranking
Coincub has been compiling the global crypto country ranking since 2021. Our vision is to provide the most comprehensive overview of active crypto economies across the globe for investors, journalists, and anyone interested in the cryptoeconomy.
Coincub brings you the latest, most comprehensive insights into this global financial phenomenon. Each year Coincub continually widens the scope of the quarterly ranking. Relevant categories are included and out-of-date ones replaced. Evolving metrics ensure that the Coincub ranking remains accurate year after year.
The Coincub ranking aggregates diverse data points, from the numbers of ATMs to the crypto trading volumes within a country. Blockchain technology development is accelerating. Some countries try to direct crypto policy and bring it within the mainstream with progressive legislation. Others try to block crypto entirely; a difficult feat considering crypto’s mainstream adoption. Blockchain-focused courses are in many universities and colleges around the world, and organizations funded by initial coin offerings are proliferating.