Current Economic Context in Serbia
Serbia is a developing economy in the Balkans, steadily modernizing to drive growth and address structural challenges. The GDP in 2024 is projected to reach $82.55 billion, with a per capita GDP of $12,515.
The country has seen strong performance in sectors like retail, construction, and IT services while facing challenges such as a public debt-to-GDP ratio of approximately 55% and inflation pressures. Serbia’s unemployment rate in March 2024 was 9.40%. This is an increase from the 9.10% rate in December 2023.
Trade plays a major role in Serbia’s economy, with nearly 65% of exports going to the EU. Agriculture, automotive manufacturing, and IT services are key industries driving growth, while infrastructure investments strengthen Serbia’s position as a regional logistics hub. Also, the government’s digitization push has laid the groundwork for innovation across industries.
Cryptocurrencies are an emerging part of Serbia’s digital economy. The cryptocurrency market in Serbia is projected to generate revenue of $9.4 million in 2024, with an average revenue per user of $32.
However, the market is expected to experience a slight decline, with a compound annual growth rate (CAGR) of -3.71%, bringing total revenue to $9.1 million by 2025.
User penetration in the market is projected to rise slightly, from 4.15% in 2024 to 4.19% by 2025. The number of crypto users in Serbia is expected to reach 295,900 by 2025.
Cryptocurrency mining is also gaining traction in Serbia, with the country becoming a hub for mining operations. This trend is attracting investors and driving demand for mining equipment.
Regulatory clarity provided by the 2021 Law on Digital Assets has further encouraged this growth, supporting Serbia’s ambitions to become a regional leader in blockchain and digital finance.
These developments, coupled with Serbia’s emphasis on innovation and economic reforms, suggest a promising future for its digital transformation. However, addressing challenges like unemployment, inflation, and public debt will remain essential for sustained economic progress.
Serbia ranks 52nd among the 133 economies featured in the GII 2024.
The State of Crypto Adoption in Serbia
Cryptocurrencies are steadily gaining popularity in Serbia, driven by clear regulatory frameworks and growing public interest. The number of users in Serbia’s cryptocurrency market is projected to reach approximately 295,900 by 2025, highlighting the increasing adoption of digital assets across the country.
The majority of crypto enthusiasts in Serbia are younger, tech-savvy individuals who see digital assets as a way to diversify income streams and guard against inflation, which has been a persistent economic concern in the country.
The accessibility of global crypto platforms has made it easier for people to participate in this growing market. Businesses in Serbia are slowly beginning to embrace cryptocurrency as well. A small number of local enterprises, including cafes, IT services, and online retailers, now accept Bitcoin and Ethereum as payment.
While this trend is still in its early stages, it demonstrates a growing willingness to integrate digital currencies into everyday transactions. However, widespread adoption for daily use is limited due to insufficient infrastructure, such as crypto ATMs and payment systems.
Crypto Law in Serbia
Serbia has taken significant steps to regulate and legalize cryptocurrency, making it one of the most progressive countries in the Balkan region for digital assets.
Legal Framework for Cryptocurrencies
Serbia introduced the Law on Digital Assets (LDA) in 2021, making it one of the first countries in the Balkans to establish comprehensive regulations for cryptocurrencies. The law provides a clear definition of digital assets, categorizing them as virtual currencies or digital tokens.
Virtual currencies are considered assets used for payment or investment, while digital tokens represent various types of rights, such as property or services.
This legal framework allows the buying, selling, and transfer of cryptocurrencies within the bounds of the law. Crypto exchanges and service providers must register with the National Bank of Serbia (NBS) or the Serbian Securities Commission (SSC), to ensure compliance with local regulations.
Licensing and Requirements
Businesses operating in the cryptocurrency space must adhere to stringent licensing requirements. For example, exchanges and other providers must:
- Have a physical presence in Serbia.
- Meet specific capital thresholds.
- Follow strict IT governance and cybersecurity protocols.
Also, crypto issuers must publish a detailed white paper outlining the project’s objectives and structure. This ensures transparency and protects investors from fraudulent schemes.
Taxation Policies
The Serbian government has developed a straightforward taxation policy for cryptocurrencies. Individuals and corporations are subject to a 15% capital gains tax on profits from digital asset transactions. However, reinvested profits can qualify for certain tax exemptions.
Furthermore, cryptocurrency transactions that do not involve conversion into fiat currency are exempt from Value Added Tax (VAT), making Serbia a relatively tax-friendly jurisdiction for crypto users.
Regulatory Oversight
The crypto market in Serbia is monitored by the National Bank of Serbia (NBS) and the Serbian Securities Commission (SSC). While the NBS primarily handles issues related to payments and banking, the SSC oversees investment-related activities involving digital tokens. This dual oversight ensures a balanced and secure regulatory environment.
Public Impact of the Law
The introduction of the LDA has boosted public confidence in digital assets. The law also incentivizes international crypto businesses to establish operations in Serbia, contributing to the growth of its fintech sector.
Serbia ranks among the top Balkan countries for blockchain startups, with companies like Tenderly raising $58 million in funding to support global projects.
Potential Benefits of Crypto Adoption in Serbia
The adoption of cryptocurrencies in Serbia offers numerous opportunities for individuals, businesses, and the economy as a whole.
With a supportive regulatory framework already in place, digital assets have the potential to drive financial inclusion, attract investments, and position Serbia as a regional hub for blockchain innovation.
Financial Inclusion
Cryptocurrencies can significantly improve financial inclusion in Serbia, especially for individuals without access to traditional banking services. As of recent years, an estimated 20% of the population in Serbia remains unbanked.
Digital assets provide an alternative way for these individuals to store, transfer, and grow their wealth without relying on conventional financial institutions.
Also, the decentralized nature of cryptocurrencies makes them accessible to anyone with an internet connection and a smartphone.
This is particularly beneficial for rural communities, where banking infrastructure is limited, but internet penetration is growing. Using digital wallets, individuals can easily participate in local and global financial systems.
Economic Growth and Innovation
Cryptocurrency adoption can drive economic growth by attracting blockchain-based startups and international investors. Serbia is already home to several blockchain companies, such as Tenderly and Balkaneum, which are leveraging the technology to develop innovative solutions for industries like fintech, supply chain, and healthcare.
By promoting a vibrant ecosystem of crypto and blockchain businesses, Serbia could boost job creation and establish itself as a regional leader in digital innovation. The country’s Law on Digital Assets (LDA) provides regulatory clarity, making it an attractive destination for foreign investment in the blockchain space.
Cross-Border Transactions and Remittances
Cryptocurrencies present a cost-effective and efficient solution for cross-border payments and remittances, addressing some of the key challenges faced by traditional methods. In Serbia, over a million people benefit annually from financial support sent by the diaspora, highlighting the importance of remittances in the country’s economy.
In 2023, remittances from Serbians living abroad totaled €4.99 billion, according to the National Bank of Serbia. Remarkably, this amount slightly surpassed the country’s foreign direct investments (FDI) for the same year, underscoring the economic significance of these inflows.
However, traditional remittance services often impose high fees and require several days to process transactions, reducing the overall benefit for recipients. Cryptocurrencies offer a viable alternative by enabling faster and cheaper transactions.
Digital currencies like Bitcoin or stablecoins allow more of the remitted funds to reach recipients directly, eliminating intermediaries and streamlining the transfer process. By adopting these technologies, Serbia could enhance financial inclusion and maximize the economic impact of diaspora contributions.
Hedge Against Economic Instability
During times of economic uncertainty or inflation, cryptocurrencies can serve as a hedge to preserve wealth. Serbia’s annual inflation rate rose to 4.5% in October 2024, the highest in five months, up from 4.2% in September.
This exceeded market expectations of 4%, driven by stable housing and utility costs (6%) and a decrease in transportation prices (-1.7%, compared to 1.8% previously).
Cryptocurrencies, with their decentralized nature and potential for long-term value growth, offer individuals an alternative way to protect their savings.
Stablecoins, tied to fiat currencies, provide a more stable option, avoiding the volatility of other digital assets. For Serbians seeking financial security during economic challenges, these digital tools are increasingly appealing.
Enhanced Transparency and Efficiency
The adoption of blockchain technology, which underpins cryptocurrencies, can improve transparency and efficiency in various sectors.
For example, blockchain can streamline supply chain management, reduce fraud in financial transactions, and enhance record-keeping in public administration.
In the context of Serbia, where efforts to digitize public services are ongoing, blockchain could play a vital role in creating secure and tamper-proof systems for government processes. This would increase trust and reduce inefficiencies, benefiting both citizens and businesses.
Challenges to Crypto Adoption in Serbia
Despite progress in cryptocurrency adoption, Serbia faces several hurdles that limit the widespread use of digital assets;
Lack of Public Awareness and Education
One of the main barriers to crypto adoption in Serbia is the lack of awareness and understanding among the general public.
While younger, tech-savvy individuals are more likely to adopt digital currencies, a significant portion of the population remains unfamiliar with how cryptocurrencies work or how they can be used.
Many Serbians, especially older generations, view crypto as complex or risky, which discourages broader adoption.
A lack of formal education and training about cryptocurrencies and blockchain technology exacerbates this issue.
Unlike some countries that integrate crypto education into academic or professional training, Serbia currently lacks widespread initiatives to improve public understanding.
Bridging this knowledge gap through targeted campaigns and educational programs could encourage more people to explore cryptocurrencies as an option.
Volatility and Perceived Risk
The high volatility of cryptocurrencies is another challenge that hinders adoption in Serbia. Fluctuating prices make digital assets a risky investment, particularly for individuals with limited financial means.
Many potential users are hesitant to invest in or use cryptocurrencies because they fear losing their money during sudden market downturns.
Also, reports of scams and fraudulent schemes associated with crypto have created a perception of unreliability. While regulations like the Law on Digital Assets have introduced safeguards, trust in the system is still building.
Efforts to enhance consumer protection and increase transparency in crypto transactions could address these concerns over time.
Limited Infrastructure and Acceptance
Infrastructure to support the use of cryptocurrencies is still underdeveloped in Serbia. While there are a few crypto ATMs and businesses that accept digital payments, they are relatively rare, particularly outside major urban areas.
This lack of infrastructure limits the practical use of cryptocurrencies for daily transactions, making them primarily an investment tool rather than a functional currency.
For example, even in cities like Belgrade, the number of businesses accepting crypto payments is modest. Expanding the availability of crypto-friendly infrastructure, such as payment terminals and ATMs, is essential for driving broader adoption.
Regulatory Challenges
Although Serbia has a clear legal framework for cryptocurrencies through the Law on Digital Assets, some gaps and ambiguities remain. For instance, the lack of specific regulations for certain types of digital assets, such as stablecoins, creates uncertainty for businesses and investors.
Moreover, the process of obtaining licenses for crypto businesses can be lengthy and complex, which may deter potential market entrants.
Also, while the current tax regime is competitive, some individuals and businesses find the capital gains tax burdensome, especially when compared to other investment options. Simplifying tax procedures and providing clearer guidelines could encourage more users to engage in the crypto market.
Skepticism Among Financial Institutions
Traditional financial institutions in Serbia have been cautious about engaging with cryptocurrencies. Some banks are reluctant to support transactions involving digital assets, citing concerns about compliance, volatility, and security.
This hesitance limits the integration of crypto into the broader financial system, making it harder for users to link their digital wallets with bank accounts or access crypto-related financial products.
Future Prospects and Trends of Crypto Adoption in Serbia
As Serbia continues to embrace cryptocurrencies and blockchain technology, the future looks promising for further adoption and integration.
Factors such as regulatory support, technological innovation, and increased global interest in digital assets suggest that Serbia is well-positioned to expand its role in the crypto landscape.
Expanding Regulatory Framework
The Law on Digital Assets (LDA), implemented in 2021, laid the groundwork for crypto adoption in Serbia, but future regulatory developments will likely refine and expand this framework. Clearer guidelines on emerging assets like stablecoins and non-fungible tokens (NFTs) could attract more investors and businesses to the market.
The government may also introduce initiatives to encourage crypto startups and incentivize blockchain research. This proactive regulatory approach could solidify Serbia’s reputation as a crypto-friendly destination in the Balkan region and beyond.
Growing Business and Institutional Interest
As the global demand for blockchain solutions grows, Serbian companies are expected to increase their focus on developing crypto-related products and services. Startups like Tenderly have already demonstrated the country’s capability to compete on the global stage.
Also, traditional institutions may begin to integrate cryptocurrency offerings into their services. Banks and financial institutions could explore crypto custody solutions, lending platforms, and payment gateways to meet the rising demand for digital assets.
This trend would bridge the gap between traditional finance and decentralized finance (DeFi), expanding access for individuals and businesses alike.
Crypto as a Tool for Financial Empowerment
With continued economic uncertainty and inflationary pressures, more Serbians may turn to cryptocurrencies as a store of value or hedge against inflation. Stablecoins, in particular, could play a significant role in preserving wealth while minimizing exposure to market volatility.
Remittances are another area poised for growth. Cryptocurrencies offer a faster and cheaper way for the Serbian diaspora to send money back home. With over 600,000 Serbians living abroad, digital currencies could significantly reduce fees and improve financial inclusion for recipients.
Increasing Use of Blockchain Technology
Beyond cryptocurrencies, blockchain technology is expected to gain broader adoption in Serbia. Industries such as supply chain management, healthcare, and public administration are exploring blockchain’s potential to enhance efficiency and transparency.
For example, blockchain can improve traceability in supply chains, ensuring the authenticity of goods and reducing fraud. In healthcare, it can enable secure sharing of patient data while maintaining privacy.
The Serbian government is also likely to explore blockchain’s applications in digital identity and land registry systems, aligning with its digitization goals.
Education and Awareness
As interest in cryptocurrencies grows, efforts to improve public understanding will become increasingly important. Universities and educational institutions in Serbia may introduce blockchain and crypto-focused courses to equip students with relevant skills. Public campaigns and workshops could also bridge the knowledge gap for those unfamiliar with digital assets.
This emphasis on education will create a more informed population, enabling individuals to make smarter financial decisions and encouraging greater participation in the crypto economy.
Collaboration with Global Markets
Serbia’s crypto ecosystem is becoming more integrated with global markets. Partnerships with international blockchain companies and participation in global crypto events are expected to increase.
This collaboration will bring new investment opportunities and technological advancements to Serbia, boosting its position in the international crypto community.
Conclusion
Serbia has made significant progress in recognizing and regulating cryptocurrencies through its Law on Digital Assets, introduced in 2021. This legislation provides a legal framework for the issuance, trading, and taxation of digital assets, promoting transparency and trust in the ecosystem. It has encouraged local startups and attracted international players to explore opportunities in Serbia by clarifying rules for businesses and investors.
Also, the law supports innovation by enabling the integration of blockchain technology into various industries, from fintech to supply chain management. These efforts position Serbia as a promising hub for digital finance and a leader in the Balkan region’s cryptocurrency landscape.
