The year 2022 was extremely difficult for investors in terms of price action. Massive dumps, historic collapses, and scams unleashed havoc on the crypto economy, leaving investors’ strategies in tatters. However, governments continue to maintain a positive stance and that reflects perfectly in their regulatory steps. Many countries embraced crypto in 2022, amidst the prolonged bear phase.
Countries across South America, the Middle East, Asia, and Europe continue to adopt cryptocurrencies, creating a positive environment for the flourishing crypto economy.
Here are the top 5 governments that embraced crypto in 2022:
- Brazil: The Brazilian government legalized the use of cryptocurrency as a payment method in 2022, following skyrocketing adoption in 2021. Jair Bolsonaro, the former President of Brazil, signed the bill to legalize the use of crypto as a payment method before going out of office. Unlike El Salvador, the crypto regulation bill in Brazil does not make cryptocurrencies legal tender. However, it allows companies in Brazil to obtain licenses to hold cryptocurrencies and other virtual assets. As a result of the crypto bill, more than 12,000 unique organizations declared crypto on their balance sheets in August last year.
- El Salvador: El Salvador is a well-known name for every crypto enthusiast. Thanks to its crypto-friendly government and an equally crypto-friendly environment. The El Salvador government plan to invest over $1 billion in the coming months to make a “Bitcoin City”. With tourist activities surging by over 30% over the past couple of years, crypto whales and startups from different parts of the world continue to set up their bases in El Salvador due to the relaxed tax rules. More than 20% of businesses already accept cryptocurrencies in the country. $BTC remains the dominant cryptocurrency in the country in terms of payment methods.
- The United Kingdom: One of the first major economies to embrace crypto with open hands in 2022, the United Kingdom continued to work toward crypto regulation despite a turbulent government. The UK government introduced the Financial Services and Markets Bill in July 2022, with the intention of becoming a global cryptocurrency hub. The bill authorizes the treasury to regulate Digital Settlement Assets (DSAs) – a term coined to address stablecoins and other digital currencies. Besides this, the country also has the Economic Crime and Corporate Transparency Bill, which proposes creating powers to seize and recover crypto assets more quickly and easily. Going forward, the UK is expected to take more positive steps to attract crypto businesses.
- United Arab Emirates: UAE has taken several strategic steps over the last few months to create a crypto-friendly environment in the country. Dubai established a legal crypto framework in March last year, with an aim to protect investors and design international standards for governance. The newly formed Dubai Virtual Asset Regulatory Authority (VARA) now has enforcement powers in Emirate’s special development and free zones. Following the path of Dubai, Abu Dhabi, another emirate, released draft recommendations for NFT trading. NFT marketplaces can now operate in Abu Dhabi as NFTs are recognized as intellectual property.
- The Central African Republic: CAR become the first African country to embrace crypto in 2022. The African nation legalized the use of cryptocurrencies in the financial markets in April 2022. The bill allows traders and businesses to use cryptocurrencies as a payment method. Going a step further, the bill also allows users to pay taxes using cryptocurrencies. CAR also launched its CBDC – Sango Coin, in July last year. $1.6 M worth of the coin has already been sold.
Bottom Line
The prolonged bear market failed to deter institutions and governments from undertaking the necessary steps to build a crypto-friendly environment. With the crypto market finally showing action after months of lull, 2023 could very well be the continuation of 2022 in terms of regulation and adoption. While keeping a check on scams and hacks is certainly a massive challenge for the stakeholders, 2023 could be the year where we see more countries embracing crypto.