On the occasion of Surfin Bitcoin, the big French conference dedicated to Bitcoin (in Biarritz), The Big Whale made a list of the 10 most "bitcoin friendly" countries, i.e. those in which it is most welcomed.

Obviously, we did not produce this list on a "wet flipper" basis. With the help of experts, we have established five essential criteria on which each country is screened:

👉 Regulation

👉 Taxation

👉 Local talent

👉 Market maturity

👉 Energy cost

We also assigned a score (between 1 and 5 whales, knowing that the more whales there are, the more positive it is) to each country based on these criteria.

ARGENTINA 🇦🇷

👉 Regulation: 🐳

👉 Taxation: 🐳🐳🐳

👉 Local talent: 🐳🐳🐳🐳

👉 Market maturity: 🐳🐳🐳

👉 Energy cost: 🐳🐳🐳🐳

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Despite its relatively unclear regulatory framework, Argentina is one of the spearheads of the Bitcoin ecosystem in the world. This is no coincidence: the country has been suffering from rampant inflation since the 1980s (215% per year on average!). Argentines are fleeing the peso and finding in bitcoin and other crypto-currencies a way around the tightening of exchange controls that tend to restrict access to the US dollar (traditionally used to protect their savings).

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As The Big Whale found out firsthand in the spring, Argentines are also fond of bitcoin because it represents an alternative to the national banking system. Almost 50% of the population does not have access to a bank account. The high level of education of the population, especially engineers, is also a factor in the consistent level of adoption of bitcoin and cryptocurrencies.

Strong government intervention in the economy also makes it easier for cryptos to take hold. It is relatively cheap to mine bitcoins, an energy-intensive activity, because the cost of electricity is kept especially low by the state. Canadian company Bitfarms has invested $250 million in 2021 to build one of the largest mining facilities in the world in Cordoba.

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SOUTH KOREA 🇰🇷

👉 Regulation: 🐳🐳🐳🐳

👉 Taxation 🐳🐳

👉 Local talent: 🐳🐳🐳🐳

👉 Market maturity: 🐳🐳🐳

👉 Cost of energy 🐳

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When people talk about bitcoin, they rarely mention South Korea. Wrong! Because the country is surely one of those where the ground is most fertile for cryptos. In addition to the fact that several large groups such as Samsung are investing more and more in the sector, South Koreans are very fond of new technologies and the rate of adoption of cryptos in the adult population, although still modest (about 5%), continues to grow.

The stability of the South Korean regulatory framework also makes it a favorable country, even if the tax promises of the new president-elect are not sure to be realized. During the campaign in the spring, Yoon Seok-Youl promised to abolish the 20% tax on capital gains below 37,500 euros of earnings, compared to 1800 euros currently. This threshold could finally be less advantageous than expected.

In addition to these two elements, South Korea has a lot of talent, especially in Tech, and well-trained employees.

UNITED ARAB EMIRATES 🇦🇪

👉 Regulation: 🐳🐳🐳

👉 Taxation: 🐳🐳🐳🐳🐳

👉 Local talent: 🐳

👉 Market maturity: 🐳

👉 Energy cost: 🐳🐳🐳🐳

It's the "Place" that's going up: in a few months, the United Arab Emirates (mainly Dubai) has established itself as one of the new bitcoin capitals. One of the reasons for this change in status is the recent adoption of a very favorable regulatory framework for businesses. Several giants such as Binance, FTX and Crypto.com set up shop in the country in 2022.

In addition to the fact that crypto companies can now reach a very wealthy clientele, they also benefit from a particularly "soft" taxation (less than 10% of corporate taxes). For individuals, it is even zero!

The UAE is also blessed with no shortage of energy, making it a potentially very attractive player for bitcoin miners. U.S. specialists like Crusoe Energy (known for its expertise in recovering flared gas that escapes from oil and gas facilities for mining purposes) signed a $350 million deal with the Abu Dhabi sovereign wealth fund in June.

UNITED STATES 🇺🇸

👉 Regulation: 🐳🐳🐳

👉 Taxation: 🐳🐳🐳

👉 Local talent: 🐳🐳🐳🐳

👉 Market maturity: 🐳🐳🐳

👉 Energy cost: 🐳🐳🐳🐳

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Boosted by China's 2021 mining ban, the U.S. has become the epicenter of this industry on a global scale. According to the University of Cambridge, 38% of the computing power devoted to mining comes from the United States, and in particular from a few states such as Georgia, Texas and Kentucky where energy (oil, gas, wind, solar) is available at hyper competitive prices.

Other US states like Florida are doing well, especially the city of Miami, whose mayor Francis Suarez is a strong advocate of bitcoin. To set an example, the mayor receives his salary in bitcoins (as does the new mayor of New York). Miami also hosted the largest Bitcoin-related conference in April 2022 (Bitcoin Miami).

California is also a forward-thinking state where, along with the popes of Tech, there are giants of the sector like Coinbase or Square, as well as thousands of particularly well-trained engineers. Not to mention New York and the power of Wall Street, also very interested in bitcoin.

On the regulatory side, the United States does not have the same standards as Europe, and, as Jeremy Allaire (Circle) recently pointed out in The Big Whale, the American regulatory framework is still very vague. The Biden administration is currently thinking about an "ambitious" crypto regulation, which we will come back to very soon.

FRANCE 🇫🇷

👉 Regulation: 🐳🐳🐳🐳

👉 Taxation 🐳

👉 Local talent: 🐳🐳🐳🐳🐳

👉 Market maturity: 🐳🐳🐳

👉 Cost of energy 🐳

"France in the top 10?!" We can already hear the comments of some (we won't give names) about the fact that the Hexagone would be ANYTHING but a bitcoin-friendly country. And yet! The world's sixth-largest economy can boast of offering it a rather favorable terrain, at least on a few points.

First, there is the very stable regulatory and political framework. France was one of the first countries in the world to adopt legislation in 2019 with the Pacte law (creation of the status of PSAN in particular) which even served as a model for the future European MiCA regulation.

The second point is the maturity of the market. The adoption rate of cryptos and bitcoin is in a high range (between 7% and 10% of the population according to studies) and France has many bitcoin-related startups (StackinSat, Bitstack, Acinq...) and several top players like Ledger, which is none other than the world leader in crypto asset custody.

The third and last point concerns all the talents available in France in the sector. As Julien Bouteloup (StakeDAO, Curve, Stake Capital, etc.) recently explained in an interview (available here), France is perhaps the country with the best engineers and developers on the planet. Cock-a-doodle-doo?

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NIGERIA 🇳🇬

👉 Regulation: 🐳

👉 Taxation 🐳🐳

👉 Local talent: 🐳

👉 Market maturity: 🐳🐳🐳🐳

👉 Energy cost: 🐳🐳🐳🐳🐳

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Nigeria consistently ranks in the top 10 countries with the most cryptocurrency users. According to analytics firm Chainalysis, it is even ahead of the United States (but behind Vietnam, India, Pakistan and Ukraine). Why such success?

First, because Nigerians use bitcoin (and cryptos) to bypass their expensive and limited banking system when it comes to transferring money abroad, and vice versa; most Nigerian banks limit the amount of currency one can take out of the country to $500.

Bitcoin is also an increasingly popular instrument in Nigeria among businesses that trade internationally. Chainalysis cites, in particular, the increase in trade with China that is done via cryptos. Not to mention that Nigeria is a major oil power, with low-cost (but high-carbon) energy and thus an interesting place for miners.

Faced with a difficult economic environment, Nigerians have many reasons to embrace virtual currencies. In August, inflation reached 20%, its highest level since 2005. As for the national currency, the naira, it keeps falling on the parallel market, where 1 dollar is now traded for 670 naira, while the central bank maintains an artificial exchange rate of 1 dollar for 420 naira on the official market.

PORTUGAL 🇵🇹

👉 Regulation: 🐳🐳

👉 Taxation: 🐳🐳🐳🐳

👉 Local talent: 🐳🐳🐳

👉 Market maturity: 🐳🐳🐳

👉 Cost of energy 🐳

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Portugal is currently one of the few countries in Europe where crypto sales are not taxable, as they are not considered currencies or financial assets. Individuals also do not have to pay VAT or capital gains taxes when buying and selling assets (hello France 👋 ), and only professional activities paid in crypto assets are taxed.

Pending new tax rules (the government announced in May that it wanted to end this privileged status... before postponing it until later), cryptocurrency investments continue to gain ground, particularly in the real estate sector with the first sale of an apartment paid for in bitcoin, without conversion to euros, completed in early May. Made possible by a new regulation from the Order of Notaries approved at the end of April, these real estate transactions could see a new population arrive. Many European developers and project owners have already settled there.

SWITZERLAND 🇨🇭

👉 Regulation: 🐳🐳🐳🐳

👉 Taxation: 🐳🐳🐳🐳

👉 Local talent: 🐳🐳

👉 Market maturity: 🐳🐳🐳

👉 Cost of energy 🐳

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On the other side of the Alps, Switzerland is probably one of the most advanced European countries. It has a simple regulatory framework and a very dynamic ecosystem. In the canton of Zug (20 minutes by train from Zurich), the "Crypto Valley" attracts many entrepreneurs who appreciate its pro-business framework. Hundreds of crypto start-ups (and many mailboxes) have set up shop in Zug in recent years; Neuchâtel, Lausanne, Geneva and Lugano also offer an attractive regulatory environment.

On the banking front, more than half of Swiss institutions believe that cryptocurrencies will become a mainstream investment category within 10 years, on par with stocks and bonds, according to a barometer by EY published earlier this year. Meanwhile, crypto startup Seba has had a banking license since 2019, a first in the world.

Switzerland's tax regime for cryptocurrencies is very advantageous compared to its European neighbors. Indeed, capital gains from the sale of cryptocurrencies are not taxable for individuals. On the professional side, the tax rates applied to these gains are significantly lower than in other countries. And in Zug, you can pay your taxes in... bitcoins.

"Switzerland has decided not to pass new laws to regulate bitcoin, it is only claimed that the players respect the current framework," says Alexis Roussel, co-founder of the exchange platform Bity. "Switzerland is a population generally educated about money, suspicious of anything centralized, I think the local success of Bitcoin has cultural explanations," he stresses.

SALVADOR 🇸🇻

👉 Regulation: 🐳🐳

👉 Taxation: 🐳🐳🐳🐳🐳

👉 Local talent: 🐳

👉 Market maturity: 🐳🐳🐳

👉 Energy cost: 🐳🐳🐳🐳

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How can we not mention El Salvador? Just a year ago, this small Central American country made headlines by becoming the first state to make bitcoin its legal tender. Since then, while there hasn't been a big crypto night (far from it), the government has nonetheless pushed through a series of measures that make El Salvador (population 6.5 million) one of the most "welcoming" countries.

The first asset of El Salvador is its "stable" taxation, or more precisely, almost nonexistent. In El Salvador, but it's not the only country, crypto capital gains are exempt from income tax. The purpose of this measure is quite simple: to attract start-ups and crypto investors, and in turn develop the local economy. Coincidentally or not, tourism in El Salvador has risen sharply in recent months, and has returned to its pre-Covid level, according to the World Tourism Organization.

To go further, the country's president, Nayib Bukele, is also working on the creation of a Salvadoran "Bitcoin City", totally dedicated to bitcoin, where there would be no taxes: no income tax, no property tax, no capital tax... This city project located in the east of the country, which is one of the most violent in the world, would be powered by the Conchagua volcano, which could provide abundant energy.

This is precisely the second asset of El Salvador: the price of its energy. Although no official figures are available, El Salvador can rely on some thirty volcanoes - twenty or so are active according to the government. According to government figures, the price of a kilowatt hour could fall below $0.05, compared to $0.2 in France.

SINGAPORE 🇸🇬

👉 Regulation: 🐳🐳🐳🐳

👉 Taxation: 🐳🐳🐳🐳

👉 Local talent: 🐳🐳🐳🐳

👉 Market maturity: 🐳🐳🐳

👉 Cost of energy 🐳

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As a leading financial center in Southeast Asia, Singapore has long built a reputation as a hub for the crypto industry, thanks in part to its favorable regulatory framework. The city-state is home to the headquarters of some of the industry's largest companies (mainly Crypto.com) and also a plethora of investment funds.

Singapore has recently been in the news (not all good) because several players linked to the recent crypto crash, Terra Luna and Three Arrows Capital, were based there. In response and to protect its reputation, the country's central bank has promised to be "brutal and particularly tough" with players who do not have sufficient guarantees. Industry giants such as exchange platforms Binance or Bybit have recently chosen to bypass this jurisdiction to avoid the potential wrath of the authorities.

Despite this upcoming hardening, the country remains a prime location with a highly skilled workforce. The country's largest bank, DBS, has launched an exchange platform. On the mining side, Singapore is not a recommended destination for this activity. Electricity is expensive, while the heat and humidity of the environment add to the costs.

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