Vietnam
Current State of Crypto Adoption in Vietnam Vietnam has seen an incredible rise in the number of people using and trading crypto. As of 2024, the crypto community in the country boasts over 20 million registered users, a massive leap from just 260,000 users in 2017. This tenfold growth highlights a significant shift in how people view and engage with cryptocurrencies. One reason for this rapid adoption is the role of remittances, which contribute substantially to Vietnam’s economy. Cryptocurrencies initially gained traction as a tool for easier and faster cross-border transactions. The trend shows no signs of slowing down, with the number of crypto users in Vietnam projected to hit nearly 16 million by 2025. By 2024, the user penetration rate is expected to reach 15.98%, slightly dipping to 15.95% the following year. According to data Triple-A, Vietnam holds the second-highest cryptocurrency ownership globally, with 21.2% of its population using crypto. Vietnam also ranks fifth on the 2024 Global Crypto Adoption Index, showing strong enthusiasm for digital currencies despite regulatory uncertainties. This high ranking is even more impressive considering the country’s relatively modest economic size compared to other top adopters. The country is also becoming a hotspot for several blockchain and crypto events such as GM Vietnam. These gatherings are helping to spread awareness and connect crypto enthusiasts, gamers, and industry experts. Recognizing this momentum, Vietnam’s Prime Minister rolled out a National Strategy on Blockchain Development in late 2024. The plan aims to position Vietnam as a leader in blockchain technology by integrating these solutions across various sectors. The Vietnam Blockchain Association (VBA) is actively supporting this vision by encouraging international partnerships and introducing regulatory sandboxes to test innovative technologies. One major focus of the strategy is the digitization of real-world assets (RWA) to enable secure, transparent international transactions. Adding to this progress, the Vietnam Academy of Blockchain and AI Innovation (ABAII) was launched in April 2024 at an annual blockchain and artificial intelligence forum. This academy aims to train and familiarize one million people with blockchain and AI technologies, pushing Vietnam further ahead as a leader in the crypto space. Regulation of Crypto in Vietnam In Vietnam, the legal stance on cryptocurrencies remains complex and restrictive. According to Article 105 of the Civil Code 2015, property is defined as objects, money, valuable papers, and property rights. Cryptocurrencies, however, do not fall into any of these categories, making them unrecognized as legal property under Vietnamese law. As a result, they cannot be used for buying, selling, or exchanging. The State Bank of Vietnam (SBV) further clarified this stance on July 21, 2017, stating that cryptocurrencies are not legal tender and are not recognized as valid payment methods. Issuing, supplying, or using digital currencies such as Bitcoin and Litecoin as a means of payment is prohibited under Vietnamese law. Non-cash payment instruments allowed include checks, payment orders, bank cards, and other tools explicitly approved by the SBV. Cryptocurrencies, not being part of this list, are therefore illegal for payment purposes. Despite these restrictions, cryptocurrency investment activities are not outright banned. In recent years, Vietnam has begun exploring the potential of blockchain and cryptocurrencies. Thus, in May 2020, Prime Minister Phạm Minh Chính instructed the SBV to initiate a pilot project for blockchain applications in cryptocurrency. By July 2021, he urged further research into digital assets, focusing on taxation and consumer protection, though no specific guidelines have yet been released. In March 2022, the Vietnam Blockchain Association was established under the Ministry of Home Affairs. It is the first legal entity centered on cryptocurrency, aiming to create a development framework for the industry. Similarly, the People’s Court in Ho Chi Minh City ruled in a 2023 criminal case involving Bitcoin theft, acknowledging Bitcoin’s economic value, despite its lack of status as legal property. This ruling reflects an ongoing debate about whether cryptocurrencies should be classified as property in Vietnam. In a promising statement in April 2024, Deputy Head of the Civil Law Department Cao Dang Vinh acknowledged that cryptocurrencies and virtual assets are not banned but require specific regulation to prevent misuse. Similarly, in February 2024, the Ministry of Finance was tasked with developing a comprehensive legal framework for crypto by May 2025. This initiative aligns with Decision 194/QĐ-TTg, which outlines Vietnam’s national strategy to combat money laundering, terrorism financing, and the funding of weapons proliferation. The framework will also include measures to mitigate cryptocurrency risks and enhance oversight. Current Usage of Crypto in Various Sectors Vietnam Crypto usage in Vietnam is expanding in various sectors despite regulatory constraints. These include: Financial Services Vietnam has a substantial unbanked population, with nearly 60% lacking access to traditional banking. This gap is increasingly filled by decentralized finance (DeFi) platforms such as Coin98. These platforms provide services such as lending, borrowing, and earning interest without the need for traditional paperwork. DeFi’s accessibility makes it especially attractive to rural communities, where banking infrastructure is limited GameFi and NFTs One of the most exciting areas for crypto adoption in Vietnam is GameFi—short for “game finance.” In these games, players earn cryptocurrency and non-fungible tokens (NFTs) as rewards. A notable example is Axie Infinity, a globally popular play-to-earn game developed in Vietnam. Through gaming, many Vietnamese are introduced to the world of cryptocurrency. This sector has led to the rise of several local startups focusing on blockchain gaming such as My DeFi Pet, 9D and Theta Arena, making Vietnam a leader in this space. Remittances Vietnam is one of the top countries for receiving money from abroad. In 2021 alone, Vietnamese people living overseas sent home over $18 billion. But here’s the problem; traditional money transfers come with high fees and slow processing times. Cryptocurrencies offer a cheaper and quicker solution. Blockchain-based transactions don’t rely on banks or middlemen, meaning lower costs and faster transfers. This makes it easier for families to support their loved ones back home. Investment and Trading Vietnam has a community of retail investors, many of whom actively trade cryptocurrencies like Bitcoin, Ethereum,
Zimbabwe
Current State of Crypto Adoption in Zimbabwe In Zimbabwe, years of inflation had wiped out savings and pensions, while a series of new currencies have left many distrustful of the banking system. As a result, cryptocurrencies became an appealing alternative, even though many people are not fully aware of the risks involved. By 2025, it’s estimated that around 253,700 Zimbabweans will be using cryptocurrencies. The user penetration rate, forecasted to be 1.48% in 2024, is expected to drop slightly to 1.46% by 2025. Despite the growing interest, Zimbabwe’s journey with cryptocurrency has been far from smooth. In 2018, the government banned financial institutions from trading cryptocurrency, aligning with other countries enforcing similar restrictions. As a result, several crypto traders have been facing several challenges. These challenges include the inability to open bank accounts for crypto related businesses. This forces businesses to rely on platforms like PayPal and Payoneer to manage funds. Consequently, it has driven much of the crypto activity underground, encouraging speculative trading and increasing the number of scams. Additionally, the ban caused significant financial losses for the citizens and discouraged some from trading. Yet, optimism around crypto remains. Zimbabwe’s Finance Minister, Mthuli Ncube, praised blockchain’s potential to cut down remittance costs, a critical issue as remittances made up 7% of the country’s GDP in 2020. Additionally, in 2021, CBZ Holdings, Zimbabwe’s biggest bank, began exploring ways to leverage cryptocurrencies and other emerging technologies. CBZ Chairman Marc Holtzman shared that the bank is keeping an open mind about these innovations. The Reserve Bank of Zimbabwe however remains cautious. In 2021, it excluded crypto assets and digital currencies from its innovation policies. This exclusion was due to concerns about the potential risks to the financial system. For now, the central bank is in “study mode,” evaluating how to safely integrate digital assets into the economy. Talks of introducing licenses for exchanges could bring legitimacy to the industry, but businesses operating in the crypto space still face significant hurdles. Interestingly, in an effort to address economic instability, Zimbabwe introduced the Zimbabwe Gold Coin (ZiG) in 2024. The ZiG can be stored in digital wallets and used for payments, with the aim of offering a more stable alternative amidst the ongoing economic turmoil. Regulation and Policies on Crypto in Zimbabwe In December 2017, the Reserve Bank of Zimbabwe (RBZ) made it clear that cryptocurrencies weren’t legal tender in the country. They also warned about the risks involved with using crypto, like money laundering and fraud. In addition, the Bank noted that anyone investing in or trading cryptocurrencies did so at their own risk, with no legal protection. By May 2018, the RBZ took stronger action, ordering all financial institutions to stop dealing with cryptocurrencies. This included banning them from trading or offering banking services to crypto exchanges. They were instructed to end any existing relationships with cryptocurrency exchanges within 60 days. Furthermore, the Bank stated that exchanges like Bitfinance (Golix) and Styx24 were neither licensed nor regulated by the RBZ. Interestingly, in 2021, Zimbabwe took a progressive step by launching a fintech regulatory sandbox. This was overseen by the Reserve Bank of Zimbabwe (RBZ), to encourage and test new financial technologies. One notable participant is Uhuru Innovative Solutions, which uses blockchain to enable low-cost, instant payments between Zimbabwe and South Africa through a WhatsApp-based service. Building on this effort and in a bid to stop underground crypto activities, Zimbabwe has now started taking steps toward clearer crypto regulations. In 2024, the National Risk Assessment Coordination Committee (NRACC) began talking to crypto service providers to develop a framework for regulating the industry. Though NRACC hasn’t provided any updates, stakeholders believe issuing licenses for crypto platforms is a key step to legitimize the industry. For that to happen, crypto needs to be officially recognized as a financial asset. This shift towards regulation aims to fix the issues caused by the lack of oversight before 2018 when unregulated exchanges led to financial losses for many people. Factors Driving Crypto Adoption in Zimbabwe Zimbabwe has become one of the interesting countries when it comes to cryptocurrency adoption, and there are several reasons for this shift. Here’s a closer look at the key factors driving the adoption of crypto in the country: Hyperinflation and Economic Instability One of the main drivers of crypto adoption in Zimbabwe is the country’s long history of hyperinflation and economic instability. Over the years, inflation has severely eroded the value of the local currency, making traditional savings and investments less reliable. Many Zimbabweans turned to cryptocurrencies as a way to protect their wealth from inflation, with crypto seen as a more stable store of value compared to the local currency. Lack of Trust in the Banking System Zimbabwe’s financial sector has faced several challenges, from frequent currency devaluations to a lack of access to banking services in some areas. This lack of trust in the banking system has pushed people to seek alternatives. Cryptocurrencies, being decentralized and not reliant on traditional banks, provide an attractive alternative for Zimbabweans who are wary of the local financial institutions. Remittances and Cross-Border Transactions Zimbabwe has a large diaspora community, and remittances play a significant role in the economy. Cryptocurrencies have made it easier and cheaper to send money across borders. Traditional remittance methods can be costly, but crypto enables fast, low-fee transfers, making it a practical solution for both senders and receivers. Fintech Innovation in Zimbabwe In recent years, Zimbabwe has seen an increase in fintech innovation, with companies using blockchain technology to offer several solutions. For instance, Uhuru Innovative Solutions has introduced a WhatsApp-based payment system, demonstrating how crypto and blockchain can address everyday financial challenges. Meanwhile, E-Livestock Global, powered by Mastercard’s blockchain-based Provenance solution, is transforming the cattle industry. This platform helps farmers verify the origin and health records of their cattle, offering buyers transparency and reducing risks. By providing end-to-end visibility into the cattle supply chain, E-Livestock Global is empowering Zimbabwean farmers and driving trust in the market. Growing Interest in
Malawi
Malawi is a small country in southeastern Africa, nestled between Mozambique, Zambia, and Tanzania. As of 2023, its population is estimated at 20.93 million, growing at an annual rate of 2.5%. Despite implementing several economic and structural reforms, Malawi remains one of the poorest nations globally. Its economy largely relies on agriculture, which engages over 80% of the workforce. Agriculture contributes around 37% to the country’s GDP, making it a significant sector. However, this also leaves the economy highly susceptible to external factors like climate shocks. The main exports include tobacco, tea, sugar, apparel, cotton, nuts, pulses, sawn timber, natural rubber, coffee, spices, hides, and wooden furniture. In January 2021, the government introduced the Malawi 2063 Vision, an ambitious plan to transform the nation into a self-sufficient, industrialized, and upper-middle-income country. The strategy focuses on agricultural commercialization, industrialization, and urban development. However, the economic situation remains difficult. A severe drought in 2024 worsened existing macroeconomic issues, leading to poor harvests and soaring food prices. Food insecurity continues to be a significant barrier to reducing poverty, with about 71% of the population living in extreme poverty. Furthermore, economic growth has been erratic over the past five years, fluctuating between less than 1% and up to 5%. The country’s slow and unstable growth is influenced by several factors. These factors include fiscal mismanagement, inadequate infrastructure, limited road networks, energy shortages, corruption, and climate-related challenges. Currently, around 51% of Malawians live below the poverty line, with 21% experiencing extreme poverty. The situation is expected to worsen due to the lingering effects of the global COVID-19 pandemic, high inflation, and disruptions in global supply chains driven by external conflicts. Current State of Crypto Adoption in Malawi Source: Pexels The Reserve Bank of Malawi (RBM) has made it clear that cryptocurrencies, such as Bitcoin, Litecoin, and Ripple, are not recognized as legal tender in the country. The central bank has also advised against using digital currencies as a replacement for the Malawian kwacha. Furthermore, it noted that these assets remain illegal for transactions within Malawi. Additionally, the RBM has cautioned potential users about the risks, urging them to be wary of crypto firms, entrepreneurs, and advisors, many of whom may lack credibility. Additionally, Malawi does not have any legally registered cryptocurrency exchanges, making trading activities largely unregulated. The lack of registered crypto exchanges complicates matters, making it challenging to prosecute fraudulent activities. Nevertheless, the bank acknowledges blockchain’s potential and is actively monitoring developments in the industry to assess whether regulatory intervention may be necessary. The RBM’s governor also highlighted that while blockchain is an innovative and versatile technology, its benefits extend far beyond cryptocurrencies alone. However, the bank emphasized that it does not endorse or permit any foreign investments in cryptocurrency. Amid increasing pressure from organizations like the ICT Association of Malawi and the Economic Association of Malawi, the RBM is re-evaluating the legal standing of cryptocurrencies. An RBM ethics and compliance official noted that a complete ban could drive cryptocurrency trading underground. Thus, this would further complicate efforts to prevent money laundering due to the difficulty of tracking these transactions. RBM’s general counsel and bank secretary, George Chioza, however, mentioned that they are currently engaging with various stakeholders to assess the way forward on cryptocurrency use in the country and will announce a decision soon. Interestingly, the popularity of cryptocurrencies in Malawi has been steadily rising, especially since the start of the COVID-19 pandemic. This surge comes as the pandemic added further strain to the country’s already fragile economy. Projections indicate that the number of cryptocurrency users in Malawi could reach approximately 214,900 by 2025. The user penetration rate is expected to hover around 1.00% in 2024, with a slight decrease to 0.98% by 2025. Despite the lack of regulatory approval, platforms like YellowCard have reported significant user engagement, with around 30,000 registered users in Malawi as of 2023. Thus, crypto trading in Malawi continues largely at users’ own risk, with the central bank urging the public to be aware of the associated risks. Key Drivers of Crypto Adoption in Malawi Source: Pexels Several factors are contributing to the growing adoption of cryptocurrencies in Malawi, despite regulatory challenges. These include: Economic Instability One factor driving crypto adoption in Malawi is economic instability. Malawi’s economy has faced numerous challenges, including high inflation, fluctuating currency values, and a lack of stable financial systems. The Malawian Kwacha has seen its value erode over time, which has made many people lose confidence in the national currency. In such an environment, people often turn to alternatives to safeguard their wealth. Thus, cryptocurrencies are seen as a hedge against inflation and a store of value that is not dependent on the local currency. Peer-to-Peer (P2P) Trading Platforms Another overlooked factor is the growing availability of peer-to-peer (P2P) trading platforms. These platforms allow individuals to buy and sell cryptocurrencies directly with each other, bypassing traditional financial institutions. In Malawi, P2P platforms like YellowCard have gained popularity, offering a safe way to trade crypto without relying on banks. This ease of access and reduced reliance on centralized exchanges has made crypto trading more accessible to a larger portion of the population. Aftermath of COVID-19 The COVID-19 pandemic has played a pivotal role in accelerating cryptocurrency adoption in Malawi. Like many other countries, Malawi’s economy was significantly affected by the pandemic. The economic downturn, combined with the closure of businesses and loss of jobs, led people to explore alternative sources of income. Cryptocurrencies provided an accessible way for individuals to engage in financial activities. This served as a good alternative as there was no need for physical interaction, which was crucial during lockdowns. Moreover, the global economic instability caused by the pandemic, including inflation and the disruption of supply chains, has led many to turn to cryptocurrencies as a potential store of value. Limited Access to Traditional Investment Options Many Malawians lack access to conventional investment opportunities such as the stock market or real estate. This lack of access is mostly due
India
Current State of Crypto Adoption in India Source: Freepik As of 2024, crypto adoption in India thrives despite the government’s strict regulatory measures. A June 2023 survey revealed that around 20% of Indians now own digital currencies, with Bitcoin and Ethereum leading the way as favorites. Fast forward to April 2024, there’s been a noticeable uptick among wealthier Indians using their annual remittance quotas to purchase spot-bitcoin exchange-traded funds (ETFs). Under these remittance rules, citizens can send up to $250,000 abroad each financial year. Also, one platform, Vested Finance, reported over $5.3 million in Bitcoin ETF transactions, with 67% of this being buy orders. India’s crypto adoption has continued to thrive, even amidst high trading taxes and strict regulations. For the second year in a row, India tops Chainalysis’s Global Adoption Index, which tracks crypto use across 151 countries. The report highlights India’s high engagement with both centralized exchanges and decentralized finance (DeFi) platforms from June 2023 through July 2024. Thus, this solidifies its lead as a global crypto powerhouse. Despite this enthusiasm, India’s government has maintained a strict approach toward crypto, especially since 2018. The Financial Intelligence Unit (FIU) issued notices to nine offshore exchanges in December 2023 for regulatory non-compliance. Binance, the largest global exchange, registered with the FIU in May 2024 but still faced a $2.25 million fine in June. Likewise, KuCoin, which registered in March, received a lesser penalty of Rs 34.5 lakh (about $41,500). Current Crypto Regulations and Policies in India Source: Freepik India currently has no specific regulations for virtual digital assets (VDAs), and while cryptocurrencies are not prohibited, they aren’t recognized as legal tender. Back in 2018, the Reserve Bank of India (RBI) barred banks and financial intermediaries from working with crypto exchanges. The Bank cited concerns over tax evasion and the challenges of enforcing compliance in peer-to-peer transactions. The RBI argued that this posed a risk to fiscal stability. This decision was challenged, and in March 2020, the Supreme Court overturned the RBI’s ban, calling it disproportionate and unconstitutional. This landmark ruling allowed the crypto industry to resume trading and investment activities, thereby encouraging crypto adoption in India. Since then, while there are still no direct regulations on crypto exchanges, the RBI has raised concerns about the potential for terrorist financing linked to cryptocurrencies. In March 2023, it urged financial institutions to apply strict anti-money laundering and foreign exchange regulations. In 2021, a bill was introduced in Parliament aimed at creating a regulatory framework for a digital currency issued by the RBI while restricting most private cryptocurrencies. This bill, however, was pulled before any debate, and it hasn’t resurfaced since. Meanwhile, the RBI launched its digital rupee in 2023, offering it as a secure alternative to cryptocurrencies but without the same tax obligations. By July 2024, the digital rupee had attracted around 5 million users. However, its uptake has been slower compared to the highly popular Unified Payments Interface (UPI), which has facilitated fast mobile payments since 2016. Despite the popularity of the Unified Payments Interface (UPI), India’s real-time mobile payment system, crypto exchanges remain restricted from using it. This makes it challenging for exchanges to integrate with the country’s primary payment network. The industry has advocated for access, but progress has been limited. As a result, the government’s stance on cryptocurrency continues to evolve, with debates ongoing. Nonetheless, crypto remains popular in India, drawing interest from both individual and institutional investors as the government works on clearer guidelines. AML and KYC Requirements As of March 7, 2023, India’s central government has brought digital assets, including cryptocurrencies, under the Prevention of Money Laundering Act (PMLA). Now, activities like trading between cryptocurrencies and fiat currencies, transferring digital assets, and exchanging one type of digital asset for another are regulated under this law. With these changes, Indian crypto exchanges must report suspicious activity to the Financial Intelligence Unit (FIU-IND) and comply with anti-money laundering (AML) and Know Your Customer (KYC) standards. Under the PMLA, crypto exchanges and other digital asset service providers in India must implement strict KYC processes to verify users’ identities. These regulations require exchanges to keep detailed records of all transactions. They also require exchanges to maintain documentation that verifies client identities and share relevant information with the government. As per Section 12 of the PMLA, exchanges are considered “Reporting Entities.” Additionally, they are legally required to monitor transactions, document identities, and report any suspicious activity to FIU-IND. Likewise, under Rule 5(2) of the PMLA’s Maintenance of Records Rules, 2005, each reporting entity is responsible for creating an internal system to manage this information and ensure compliance. In summary, exchanges in India are required to adhere to comprehensive AML and KYC standards, ensuring that crypto-related activities align with national financial laws. Crypto Travel Rule in India As stated earlier, the Indian Ministry of Finance officially included Virtual Digital Assets (VDAs) like cryptocurrency under the Prevention of Money Laundering Act (PMLA). India then took a significant step to strengthen its anti-money laundering (AML) framework by applying the Financial Action Task Force (FATF) Travel Rule to Virtual Digital Assets (VDAs), including cryptocurrencies. The rule, initially created for traditional banking, was expanded to include Virtual Asset Service Providers (VASPs) in 2019, requiring them to collect and share the sender and recipient information on transactions. The “Travel Rule” requires essential data to accompany transactions, such as the sender’s name, account number (or wallet address), address, and identification details. Similarly, recipient data must also be included to ensure transparency. Following this update, the Financial Intelligence Unit (FIU-IND) rolled out specific AML (Anti-Money Laundering) and CFT (Counter-Terrorism Financing) guidelines to VDA service providers, mandating compliance with the Travel Rule. The guidelines specify that: By requiring that both sender and receiver details are tracked and shared, these regulations add transparency and help authorities monitor digital transactions more effectively. Taxation of Crypto in India In 2022, the Indian government introduced a new tax regime for cryptocurrencies and other digital assets, imposing a 30% tax on any income derived
Sweden
The Current State of Crypto Adoption in Sweden Source: Freepik Sweden has seen a growing interest in cryptocurrency, with a significant portion of the population, particularly younger demographics, showing curiosity and engagement in the space. The crypto market’s strong performance in late 2020 and throughout 2021 played a key role in driving this new interest. During this time, stories of significant profits encouraged many to enter the market. The number of first-time buyers was noticeably higher between 2020 and 2022 compared to other years. Approximately 16% of crypto owners in Sweden purchased their first digital assets in 2023 or 2024. This means nearly 90,000 Swedes joined the market for the first time during this period. Although Sweden has a strong technological infrastructure and a population open to innovation, their overall adoption rate remains relatively low compared to some other European countries. Swedish institutions have played a pivotal role in advancing cryptocurrency adoption. The Riksbank has been at the forefront with its e-krona pilot, which is now in its fourth testing phase. Other financial institutions have also shown a willingness to engage with the sector. This is seen in the AP7 pension fund’s indirect investments in Bitcoin through its portfolio companies. However, not all institutional feedback has been positive. Agencies such as the Swedish Financial Supervisory Authority and the Swedish Environmental Protection Agency have expressed concerns about the environmental impact of crypto mining. Cryptocurrency is appealing primarily to younger generations, who are more open to digital innovation and alternative investment options. Many Swedes also value the autonomy and decentralization offered by blockchain technology. Swedish individuals see cryptocurrencies as tools for financial independence and asset control. This sentiment aligns with Sweden’s broader cultural emphasis on self-reliance and innovation. Sweden’s commitment to digital innovation could impact the future of cryptocurrency adoption. Crypto Law in Sweden Source: Freepik Sweden does not have specific legislation regulating cryptocurrencies or crypto assets but applies existing financial and anti-money laundering laws to certain crypto-related activities. Swedish authorities also implement EU directives. While there are no laws specifically targeting cryptocurrencies, some rules apply depending on the nature of the activity. Cryptocurrency as Currency The Swedish Central Bank, Riksbank, has declared that cryptocurrencies like Bitcoin are not considered legal tender. Despite this, cryptocurrencies are used as a means of payment. Financial Services and Securities Regulation Cryptocurrency exchanges and related services fall under the Financial Supervisory Authority’s (Finansinspektionen) oversight. These activities are classified as financial services and require registration and compliance with financial regulations. If the sale of crypto assets qualifies as a financial service, the operator must register with the Financial Authority, submit relevant information, and maintain transaction records. The operator is also required to implement anti-money laundering measures. Failure to register as required can result in the Financial Authority imposing penalties or ordering the cessation of the activity. Cryptocurrencies such as Bitcoin and Ether are traded on the Nasdaq Exchange as exchange-traded notes (ETNs). These are considered securities instruments and are subject to Swedish securities legislation. However, the classification of cryptocurrencies themselves as financial instruments remains unclear. Consumer Protection Sweden’s general consumer protection laws may not apply to purchases made with cryptocurrencies. Minister for Financial Markets Per Bolund has urged caution when using cryptocurrencies, highlighting their unregulated nature and associated risks. Similarly, ICOs lack consumer protection under Swedish law. Anti-Money Laundering (AML) Providers of crypto assets must comply with the Swedish Money Laundering Act if their activities fall under the scope of Finansinspektionen. This law enforces the EU’s Fourth Anti-Money Laundering Directive. Sweden has yet to integrate the Fifth Anti-Money Laundering Directive, which would impose stricter rules on virtual currencies. Cryptocurrency Taxes in Sweden Source: Freepik Sweden treats cryptocurrency in a way similar to other assets. Cryptocurrency is subject to three primary types of taxes: Capital Gains Tax (CGT), Income Tax, and Interest Income Tax. Below is a detailed explanation of how each tax applies to various cryptocurrency activities. Capital Gains Tax Cryptocurrency transactions that involve selling, exchanging, or using crypto to purchase goods or services are subject to Capital Gains Tax. This tax also applies if you lend your cryptocurrency out. The taxable amount is calculated based on the difference between what you paid for the cryptocurrency and what you received in return. The value is converted into local currency at the time of the transaction. If you paid any trading fees, you can add them to the cost basis, which reduces the taxable amount when you sell or trade the cryptocurrency. For example, if you buy crypto and pay a trading fee, the fee is added to the purchase price. When you sell, you subtract the trading fee from the sale price, lowering your taxable gain. Income Tax If you earn cryptocurrency as payment for work, this is classified as regular income and is subject to Income Tax, just as salary would be. The amount you earn in crypto is taxed based on its value at the time you receive it. Later, when you sell or exchange the cryptocurrency, any profit is subject to Capital Gains Tax. The cost basis for this crypto is the amount you reported on your income tax return. Interest Income Tax If you receive crypto as staking rewards or loan interest, it is subject to Interest Income Tax, which is taxed at a rate of 30%. These earnings are taxed similarly to interest from traditional financial instruments. The tax applies to the amount of crypto you earn through these means, and if you make any payments related to these earnings, such as interest paid on a loan, those payments are fully deductible. Key Scenarios Factors Driving Crypto Adoption in Sweden Several factors contribute to the increasing adoption of cryptocurrency in Sweden: Crypto Regulations in Sweden Source: Freepik Sweden’s regulatory framework for cryptocurrencies is evolving as these technologies continue to grow. Currently, the legal system does not have specific regulations dedicated solely to blockchain or cryptocurrencies. These technologies fall under existing sector-specific regulations. As cryptocurrencies are recognized as a means of payment,
New Zealand
Current State of Crypto Adoption in New Zealand Source: Freepik With traditional paths to financial security becoming increasingly out of reach, many Kiwis are turning to cryptocurrencies as a promising alternative. This trend is evident as many Kiwis are turning to digital assets as a viable alternative to build wealth and achieve financial independence. A new survey conducted by Protocol Theory, in collaboration with Easy Crypto, New Zealand’s leading cryptocurrency exchange, sheds light on this growing trend. According to the findings, nearly half of New Zealanders have either already invested in cryptocurrencies or are seriously considering doing so in the future. The survey indicates that around 50% of New Zealanders have owned, currently own, or plan to invest in crypto in the near future. This trend highlights a significant shift in investment preferences, as more people become dissatisfied with conventional financial systems. One of the main attractions of cryptocurrency for New Zealanders is its potential to reduce profits for traditional financial institutions. About 33% of respondents expressed that investing in crypto offers a way to minimize the influence of banks and corporations. This influence is often seen as a barrier to their financial independence. Interestingly, 60% of survey participants believe they can make small, incremental investments in cryptocurrency over time, compared to only 16% who feel the same about real estate. This perception points to the lower entry barriers in crypto investments, making it an appealing option for those who may find property ownership out of reach. By 2025, the number of crypto users in New Zealand is expected to reach nearly 1.94 million. Additionally, the user penetration rate is projected to be 36.68% in 2024, remaining steady into 2025. Amid this surge in crypto interest, the Reserve Bank of New Zealand has initiated a new consultation phase on the development of a Central Bank Digital Currency (CBDC). The focus is on gathering feedback about potential design features for a digital version of the New Zealand dollar (NZD). The proposed digital currency would be exchangeable with physical cash, bank deposits, and other financial assets. However, unlike traditional currencies, the Reserve Bank would not issue the CBDC directly to consumers. Instead, private sector players like banks and payment service providers would manage their distribution and offer related services. The CBDC aims to integrate features like smart contracts, enabling programmable payments and automated transactions. For instance, a business owner in New Zealand could use a digital account to set up smart contract-based payments. This includes releasing funds only after specific conditions are met, such as the fulfillment of an order. While the Reserve Bank’s consultation process is ongoing, with the current phase concluding on July 26, the full design and cost-benefit analysis (Stage 2) is set to continue until 2026. This indicates that New Zealand is still in the early stages of its CBDC journey. In the meantime, the country already has several Bitcoin ATMs, such as those operated by Localcoin, serving various locations, making crypto access easier for the public. Additionally, New Zealand charities are allowed to accept cryptocurrency and NFT donations. Several well-known charities, such as UNICEF New Zealand, Plunket, and HeartKids, have already embraced this option. They use third-party platforms like The Giving Block to facilitate the donation process. Regulation of Crypto in New Zealand Source: Freepik As the popularity of cryptocurrencies continues to grow in New Zealand, regulatory bodies have stepped in to provide oversight and guidelines for this emerging sector. Although cryptocurrencies are not considered legal tender in the country, the businesses and services related to them are regulated under various financial laws. However, the country has established a regulatory framework to oversee cryptocurrency-related businesses. This includes exchanges, brokers, and Initial Coin Offering (ICO) providers, by treating them as financial services. This regulation falls under the Financial Markets Authority (FMA) jurisdiction, which requires these businesses to obtain an FMA license to operate. Blockchain technology itself, along with the use of cryptocurrencies and NFTs, is also fully legal in New Zealand. Although no specific regulatory system is dedicated exclusively to blockchain, several existing frameworks may apply based on the specific use case. For instance: The Department of Internal Affairs (DIA) is responsible for overseeing AML compliance, with added requirements for exchanges under the Financial Advisors Act. ICOs are evaluated individually to identify the appropriate regulatory framework. Furthermore, businesses offering ICOs that classify their tokens as financial products must register with the Financial Service Providers Register. They must also comply with AML regulations and adhere to fair dealing rules, which prohibit misleading advertising and deceptive practices. Taxation of Crypto in New Zealand Source: Freepik New Zealand’s approach to taxing cryptocurrencies is still developing, as there is no dedicated legal framework for crypto tax at the moment. However, the Inland Revenue Department (IRD) has provided some guidance on how crypto assets are treated under the current tax system. Rather than being classified as currency, crypto assets are considered personal property for tax purposes. For tax purposes, cryptocurrency is subject to Income Tax rather than a specific Capital Gains Tax. This means profits from trading or disposing of crypto assets are taxed at your marginal income tax rate, which can be as high as 39%, depending on your total annual income. The Taxation (Annual Rates for 2021-22, GST, and Remedial Matters) Act 2022 classifies the trading of crypto assets as a “financial service.” This makes it an exempt supply under the Goods and Services Tax (GST) Act 1985. The following scenarios are considered taxable disposals of crypto: In addition, acquiring crypto can also trigger taxable events. The IRD notes that mining rewards and certain types of airdrops are subject to Income Tax. As part of ongoing efforts to regulate the crypto-asset industry, the New Zealand Government introduced the Taxation Bill in August 2024. This bill includes significant changes for the crypto industry. A key provision is the adoption of the OECD’s Crypto-Asset Reporting Framework (CARF). The OECD framework is aimed at increasing transparency in crypto-asset transactions. This is done by
Finland
Current Crypto Adoption Status in Finland Source: Freepik Cryptocurrency adoption in Finland is steadily growing, with 300,000 Finns, which is about 7% of the adult population owning some form of crypto. Notably, most crypto holders are young, with two-thirds under the age of 40. The interest in digital currencies surged during the latter half of 2020 and into 2021, coinciding with a rapid rise in crypto prices. A majority of Finnish crypto owners over 60% entered the market after 2019, reflecting the increasing popularity of digital assets in recent years. Projections suggest that by 2025, the number of users in the cryptocurrency market could reach 2.49 million. Moreover, surveys indicate that within the next decade, over one million Finns are likely to own cryptocurrency. With this growth comes heightened regulatory oversight. In 2023, the Finnish Tax Administration found €30 million in unreported cryptocurrency gains, resulting in tax bills and late payment fees for investors. Additionally, Finland’s Tax Administration reported that approximately 150,000 people declared income from cryptocurrencies in 2022, a staggering increase from just 3,400 declarations in 2020. With the rise of crypto adoption in Finland, the country is also engaged in preparations for the potential launch of a digital euro. Although the decision to issue a digital euro has not yet been made, its primary aim would be to complement physical cash. Additionally, it aims to enhance the payment options available to consumers and businesses across the eurozone. The European Central Bank (ECB) concluded the investigation phase of the digital euro project in October 2023 and has now entered a two-year preparation phase. The goal is to ensure that central bank money remains a stable monetary anchor, promoting both competition and efficiency in payments. Interestingly, Finland has a historical connection to the concept of central bank digital currencies (CBDCs). In the 1990s, the Bank of Finland introduced the Avant smart card system, a pioneering attempt at what would now be termed a ‘token-based retail CBDC.’ The system launched in 1993, was initially intended to replace coins and small-denomination banknotes, offering users an easy and anonymous payment option similar to cash. However, Avant faced challenges, including fees for reloading cards and limited adoption by merchants, which ultimately led to its discontinuation in 2006. Although the initiative did not succeed as expected, it provided valuable insights into the future development of digital payment systems. Factors Driving Crypto Adoption in Finland Finland is witnessing a notable rise in crypto adoption, driven by several key factors that make digital currencies increasingly attractive to its citizens. These include: Technological Infrastructure One of the key factors driving crypto adoption in Finland is its robust technological infrastructure that supports digital innovation. The country has a high level of internet penetration and a population that is generally tech-savvy. This environment fosters the development and use of cryptocurrencies, making it easier for individuals and businesses to engage with digital assets. Government Support and Regulation The Finnish government has adopted a proactive approach towards cryptocurrencies. Instead of outright bans, authorities are creating regulations that promote transparency and security in the crypto space. For example, the Virtual Currency Act which regulates crypto exchanges and wallet providers ensures that they comply with the Anti-Money Laundering and Know-Your-Customer rules. This regulatory clarity encourages people to invest in and use cryptocurrencies without the fear of sudden legal repercussions. Financial Education and Awareness The Finnish population is growing aware of cryptocurrencies. Many educational institutions and online platforms offer courses and resources that explain blockchain technology and digital currencies. For example, Unichrone offers an interactive course on blockchain technology for people in the IT space or those interested in Blockchain. Likewise, the University of Oulu Graduate School also offered a blockchain management course to graduate students interested in blockchain technology for five days. As people become more informed, they are more likely to consider cryptocurrencies viable investment options and means of transaction. Investment Opportunities With traditional investment avenues offering lower returns, many Finns are turning to cryptocurrencies as an alternative investment option. The potential for high returns attracts both individual investors and institutional players. As the market matures, more people see cryptocurrencies as a legitimate way to diversify their portfolios. Emergence of Blockchain and Crypto Startups The growth of blockchain and crypto startups plays a crucial role in driving crypto adoption in Finland. These innovative companies are making it easier for individuals and businesses to engage with digital currencies. Additionally, these companies foster local adoption by developing user-friendly applications that simplify crypto transactions, investments, and payments. For example, crypto wallets and payment processors developed by Finnish startups make it seamless to buy, store, and spend digital assets. As these solutions become more accessible, more people begin using cryptocurrencies in their daily lives. Regulatory Stance on Crypto Adoption in Finland Source: Freepik Finland has established a clear legal framework for the regulation of cryptocurrency activities, ensuring transparency and stability in the sector. Buying, selling, and using cryptocurrency is legal in the country. However, operating within this space comes with regulatory obligations. On May 1, 2019, Finland enacted the Act on Virtual Currency Providers to regulate crypto service providers, including exchanges, wallet providers, and virtual currency issuers. The Finnish Financial Supervisory Authority (FIN-FSA) serves as the registration and supervisory body for these activities. This regulatory framework requires providers to register with FIN-FSA to legally operate and mandates strict adherence to anti-money laundering (AML) laws. The Virtual Currency Act reflects Finland’s commitment to combating financial crime by aligning with the European Union’s Fifth Anti-Money Laundering Directive (5AMLD). The law ensures that providers safeguard customer funds, store documents properly, and segregate client assets from operational funds. Additionally, crypto businesses must conduct thorough customer due diligence and report suspicious transactions to the Financial Intelligence Unit. Some activities, such as operating within a closed network or offering services on a limited, incidental basis, are exempt from registration requirements. In 2018, the Finnish government outlined additional measures to ensure transparency with the release of Government Proposal 167/2018. This led to the
Samoa
Overview of Samoa’s Economy Samoa’s economy relies heavily on tourism, agriculture, remittances, and foreign aid, making it vulnerable to global crises and natural disasters. The primary export markets for Samoa include the United States, India, New Zealand, and Hungary. Its main import partners are China, Singapore, New Zealand, South Korea, and the United States. However, the vale of imports significantly exceeds exports. Agriculture is a key sector in the country, employing about two-thirds of the workforce and accounting for 9% of the nation’s exports. Staple crops in the country include coconuts, bananas, cocoa, and copra. Fishing also plays a crucial role in both the economy and the local diet, with roughly 25% of households depending on it for income. As stated earlier, Samoa’s economy is vulnerable to global crises and this was evident during the COVID-19 pandemic. The pandemic had a severe impact on the country, further pushing the economy into a deep recession. As a result, in July 2021, the World Bank downgraded Samoa’s status from an “upper-middle-income” to a “lower-middle-income” country. This downgrade was largely due to declines in tourism, business services, transportation, and communications. Luckily, after a challenging period during and after the COVID-19 pandemic, Samoa’s economy showed a strong recovery in 2023. This rebound was largely driven by tourism, which has nearly returned to pre-pandemic levels. However, the economy remains highly dependent on remittances and foreign aid, with limited diversification. Samoa is also highly susceptible to natural disasters, including the infamous 2009 earthquake and tsunami and severe cyclones in 2012 and 2018. These disasters together inflicted economic losses and destroyed several properties in the country. Current State of Crypto Adoption in Samoa Source: Pixabay The Central Bank of Samoa (CBS) has consistently warned the public about the risks of investing in cryptocurrencies like Bitcoin, OneCoin, Ethereum, EOS, and Litecoin. In a 2017 statement, the Bank advised people to be cautious and fully understand how these investments work. The Bank also pointed out the speculative nature and lack of regulation in the digital currency market. They also encouraged individuals to contact the Bank if they had any doubts about these ventures. The Bank has since launched extensive awareness campaigns to educate the public on the dangers of speculative schemes and unregulated crypto investment. The Government noted that these campaigns are important, especially as promotions targeting Samoan investors continue to rise. Furthermore, specific schemes like OneCoin, a “Hybrid Ponzi-Pyramid Scheme” have attracted attention for allegedly promising high rewards while carrying significant risk. The C.B.S. therefore warned investors to avoid such schemes. This warning came after learning of fraudulent activities linked to OneCoin, including police raids at its headquarters in Bulgaria. In response, Samoa’s Exchange Controls Regulations prohibit transferring funds out of the country for OneCoin transactions without the Central Bank’s approval. The CBS also moved to amend the Anti-Money Laundering Prevention Act of 2007 to address these issues. In June 2018, Parliament endorsed these updates to strengthen laws on money laundering and counter-terrorist financing. These laws aimed to help protect Samoa’s financial infrastructure from the impact of unregulated digital currencies. In 2023, the Government of Samoa clarified that it had not endorsed new initiatives like the Samoa Stock Exchange, Samoa Digital Asset Exchange, or the Oceania Special Economic Zone. The Government stressed that it would only support projects that have undergone a thorough review and are proven to be safe, beneficial, and sound for the Samoan economy and its people. Challenges to Crypto Adoption in Samoa Source: Freepik Adopting cryptocurrencies in Samoa faces several significant hurdles, largely due to economic, regulatory, and societal factors. Despite the growing global interest in digital currencies, Samoa’s cautious regulatory approach makes widespread crypto adoption challenging. Here’s a look at these barriers to adopting crypto in Samoa: Lack of Regulation and Legal Framework One of the most pressing issues is the absence of a clear regulatory framework for cryptocurrencies. The Central Bank of Samoa (C.B.S.) has not recognized digital currencies as legal tender, leaving the industry unregulated. This lack of regulation creates uncertainty for potential investors and businesses, making it difficult for them to operate securely within the market. Without proper guidelines, there is no legal protection for consumers against fraud, scams, or loss of investment. Thus, these problems further discourage many from engaging with digital currencies. Economic Vulnerability Samoa’s economy heavily relies on tourism, agriculture, remittances, and foreign aid. This makes it vulnerable to external shocks like natural disasters and global economic downturns. Given these economic sensitivities, the government and financial regulators are highly risk-averse, prioritizing stability over the volatile nature of cryptocurrencies. Also, investments in digital currencies are considered speculative and high-risk. Consequently, this may not align well with the country’s focus on economic resilience and safeguarding its limited financial resources. Public Skepticism and Low Awareness Another significant barrier to crypto adoption in Samoa is the general public’s lack of knowledge about digital currencies and blockchain technology. Many people do not fully understand how cryptocurrencies work or the risks involved. The Central Bank has issued several warnings about the speculative nature of digital currencies, advising the public to be cautious. High-profile scams like OneCoin, which targeted Samoan investors, have further deepened these speculations. As a result, many people view cryptocurrency investments as risky or outright fraudulent. Concerns Over Security and Fraud Security issues are a major challenge for crypto adoption in Samoa. The risk of cybercrime, hacking, and fraud is high, especially given the lack of robust cybersecurity measures. Without strong protections in place, potential investors are at risk of losing their money to phishing schemes, hacking incidents, or fraudulent projects. This fear of losing hard-earned money keeps many Samoans away from exploring digital currencies as a viable investment option. Limited Access to Technology and Internet Services For widespread crypto adoption, reliable internet access is crucial. However, in Samoa, internet penetration is relatively low, particularly in rural areas. Many people lack access to smartphones, computers, or high-speed internet, which are necessary tools for engaging with digital currencies. This digital divide
Netherlands
Current State of Crypto Adoption in the Netherlands Cryptocurrencies are becoming increasingly popular in the Netherlands, with about 14% of the population holding digital assets as of mid-2022. Despite warnings of risks, many Dutch people are eager to take advantage of the potential of crypto as an alternative to traditional money. Businesses across the country such as Hotel van Walsum, now accept Bitcoin as payment. This widespread adoption strengthens crypto’s role as a legitimate currency in the country. It also attracts more people to consider it as an alternative to traditional money. The Netherlands is seeing a steady rise in cryptocurrency users, with projections estimating the number to reach 5.64 million by 2025. The user penetration rate is expected to grow from 31.77% in 2024 to 31.84% by 2025. Recognizing this momentum, the Dutch government has implemented proactive regulations aimed at ensuring fair play and preventing money laundering. This approach has allowed crypto casinos like Bitcasino and Rocketpot to thrive in a regulated environment, attracting both local and international interest. However, the road to becoming a crypto-friendly hub hasn’t been without its challenges. For example, when Binance applied for regulatory approval in the Netherlands, it was denied by Dutch regulators under the Central Bank’s oversight. This denial was due to concerns about compliance and consumer protection. As a result, Binance withdrew its services from the Dutch market. Similarly, Coinbase faced regulatory scrutiny and was fined €3.6 million by the Dutch Central Bank for failing to comply with domestic regulations. From these, it is evident that the Netherlands is showing how a country can encourage crypto adoption while also putting safeguards in place. These safeguards apply even if they mean losing big players in the crypto space. Crypto Regulations in the Netherlands Source: Freepik While crypto assets are not directly regulated under Dutch law, they still fall under the category of financial products. The Dutch Implementation Act of May 21, 2020, brought wallet providers and crypto exchanges under the scope of the Fifth European Directive on Anti-Money Laundering (AMLD V). This move was designed to ensure transparency and reduce financial crime in the crypto space. Under AMLD V, crypto service providers in the Netherlands must register with the Dutch Central Bank (DNB). This registration process involves adhering to strict integrity standards. This includes implementing Anti-Money Laundering (AML) policies, Know Your Customer (KYC) procedures and monitoring transactions. Crypto companies operating without proper registration risk hefty fines and even imprisonment. Furthermore, under Money Laundering and Terrorist Financing Prevention Act (Wwft), the regulated crypto service providers in the Netherlands include: There are also several rules crypto providers must comply with under the Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations. These include identifying and verifying customers, monitoring transactions for suspicious activity and others. In 2023, the International Organization of Securities Commissions (IOSCO) started consulting on new recommendations for regulating crypto assets. Additionally, the AFM began processing MiCAR (Markets in Crypto-Assets Regulation) license applications through a digital portal launched in April 2024. One of the main functions of the AFM is to advise crypto service providers to apply for a MiCAR license rather than just registering with the DNB. The AFM will also handle the licensing of crypto firms, transitioning from simple registration with the DNB. The Netherlands also aligns with the Financial Action Task Force (FATF) standards, following the FATF’s Travel Rule. This rule recommends that Virtual Asset Service Providers (VASPs) share identifying information about the originator and recipient of cryptocurrency transactions. Although not yet mandated in the Netherlands, the Travel Rule is expected to shape future regulations. Crypto Taxation in the Netherlands In the Netherlands, cryptocurrencies are treated as taxable assets by the Dutch Tax and Customs Administration, known as the Belastingdienst. Additionally, Dutch taxpayers declare income under a three-box system. For most people, crypto falls under Box 3, known as Vermogensrendementsheffing, where the tax is based on an assumed return rather than actual gains. Furthermore, while there’s no capital gains tax, crypto is subject to wealth tax. Thus, the Dutch tax system charges a 36% tax on a presumed yield from your total asset value. This includes crypto holdings, as of January 1 each year. Essentially, it means that even if you simply hold onto your crypto (HODLing), you’ll still be taxed on the assumption that your assets will increase in value. However, if you are actively day trading, mining crypto (beyond a hobby level), or have insider trading knowledge, your crypto income might be classified under Box 1 and taxed as regular income. The Dutch Ministry of Finance has also opened a public consultation to gather feedback on proposed laws. These proposed laws are aimed at tightening crypto tax regulations and boosting transparency in digital asset ownership. While consultation will be open until November 21, 2024, the new rules are expected to take effect on January 1, 2026. These rules will require crypto service providers in the Netherlands to collect, verify, and report user data to the Dutch Tax Administration. This aligns with the EU’s Directive on Administrative Cooperation (DAC8), which standardizes the sharing of crypto-related information across EU member states. The Ministry noted that the goal is not to increase the tax burden but to improve transparency and ensure fair tax practices in the growing crypto market. Key Factors Driving Crypto Adoption in the Netherlands Source: Freepik Cryptocurrency adoption in the Netherlands is growing rapidly, thanks to several key factors that make it an appealing choice for investors, businesses, and everyday users. Below are the main factors driving crypto adoption in the country: Increasing Accessibility The ease of accessing crypto in the Netherlands has significantly boosted adoption. With a growing number of crypto exchanges and user-friendly mobile apps, it has become easier for Dutch residents to buy, sell, and trade digital assets. The launch of major platforms like OKX has made it easier to offer crypto services in Dutch, increasing accessibility for local users. Additionally, the availability of Bitcoin ATMs such as the one in Amsterdam’s
Bangladesh
Crypto Laws in Bangladesh Source: Freepik When it comes to crypto adoption in Bangladesh and the regulations involved, the country finds itself in a tough spot. Despite the global use of digital currencies, the country has been cautious and rigid in regulating crypto. On one hand, the government knows emerging tech, like blockchain, is important. This is seen in the publication of the 2020 National Blockchain Strategy. However, cryptocurrency itself remains illegal. The Bangladesh Financial Intelligence Unit (BFIU) and the Bangladesh Securities and Exchange Commission (BSEC) actively track financial activities. These organizations don’t regulate cryptocurrencies, but their work affects crypto transactions. What does this mean for the everyday Bangladeshi interested in crypto? Well, it’s a tough road. The government’s position on crypto is clear as it issued a strict ban on Bitcoin and other cryptocurrencies in 2017. It warned that using them could lead to imprisonment. One of the government’s main concerns is the volatility of cryptocurrencies. The rapid fluctuations in value could lead to financial losses for citizens who invest, which has only heightened the government’s wariness. In 2018, the government ordered Internet Service Providers (ISPs) to block access to several cryptocurrency trading platforms. This included popular sites like Coinbase and Binance. This aimed to curb citizens’ ability to trade digital assets. It also sought to reinforce the government’s anti-crypto stance. While much of the world is embracing cryptocurrency, Bangladesh resists it. It enforces this via the Foreign Exchange Regulation Act. Under this Act, engaging with crypto for fraudulent activities is and carries severe consequences. The central bank in a notice also said they had received reports from the media. These reports stated that transactions in cryptocurrencies like Bitcoin, Ethereum, Ripple, and Litecoin were being made on exchange platforms in Bangladesh despite it not being legal tender. “As virtual currency is prohibited under the existing laws of the country. This type of transaction cannot be done through any domestic-foreign app.” The Special Public Prosecutor (PP) of Dhaka Cyber Tribunal, Nazrul Islam Authorities can also punish those using cryptocurrency for illegal activities under the Foreign Exchange Regulation Act of 1947, the Anti-Terrorism Act of 2009, and the Money Laundering Prevention Act of 2012. These laws show the government’s aim to stop the illegal use of digital currencies. Despite these legal obstacles, some people still trade cryptocurrencies. The Current State of Crypto Adoption in Bangladesh Source: Freepik As digital currencies gain global use, Bangladesh has become a top player in cryptocurrency. A Chainalysis report says, that despite legal restrictions, Bangladesh is 35th in the 2024 Global Crypto Adoption Index. Out of 151 countries assessed, Bangladesh is notable for its continued cryptocurrency use, despite the lack of legal recognition for digital currencies. Another report estimates that 4.3 million Bangladeshis own digital assets. This shows a growing interest in crypto, despite regulatory challenges. However, the Bangladeshi government has approached cryptocurrencies with caution. It states that cryptocurrencies are not legal tender in Bangladesh. Anyone using them does so at their own risk. This warning shows the government’s concern about unregulated cryptocurrencies, especially those used for illegal activities. In 2019, the Bangladesh Bank reaffirmed its stance and noted that said cryptocurrencies are still unauthorized. Anyone found dealing with them would face legal action. The central bank warned banks to avoid crypto transactions and that they should not provide services to businesses in the digital asset market. A key concern for the government is the use of cryptocurrencies to launder money and finance terrorism. So, the government is set on curbing such activities before they gain traction in the financial system. These strict rules aim to protect the country’s finances and prevent crime. But they may stifle the innovation and opportunities that come with cryptocurrency. Despite these, the Bangladesh government has shown interest in developing its digital currency. In 2020, the Bangladesh Bank revealed plans for a pilot project aimed at creating a digital version of the Bangladeshi taka, with the potential for future launch. Thus, for now, crypto adoption in Bangladesh is still growing. Moreover, individuals and communities are driving this growth by operating outside the formal banking system. Drivers Behind the Adoption of Crypto in Bangladesh The rise of crypto adoption in Bangladesh is an interesting trend that is hard to ignore. While the country’s regulations on digital currencies remain tight, the fascination with crypto keeps growing. So, what’s driving this shift? Let’s look at some of the factors below: Tech-Savvy Youth Population Bangladesh has a young population that is becoming more connected to technology. With the high use of smartphones with access to the internet, young people are exploring digital currencies. Their curiosity about decentralized finance and blockchain fuels their interest in cryptocurrencies. As they learn more, they see crypto as a path to financial freedom. Remittances and Cross-Border Transactions Many Bangladeshis struggle with high fees and long delays using traditional remittance channels. As one of the world’s largest remittance recipients, many rely on money sent home to support their families, making the process even more stressful. However, cryptocurrencies can improve these transactions as they are faster and cheaper for sending money across borders. Promise of High Returns This promise of high returns is one of the reasons we see the increased rate of crypto adoption in Bangladesh. It’s hard to ignore the stories of people who have made a fortune in the crypto market. While it’s true that the crypto market is unpredictable, the promise of quick profits has caught the attention of those seeking alternative ways to invest their money. In a country where traditional investments may fail, many see crypto as a golden opportunity. It’s a chance to mix things up, diversify their investments, and enjoy substantial gains. Challenges Hindering Crypto Adoption in Bangladesh Source: Freepik While the interest in cryptocurrency is growing in Bangladesh, several challenges still hold back widespread adoption. Here are some of the main challenges hindering crypto adoption in Bangladesh: Regulatory Uncertainty One of the biggest hurdles is the lack of clear regulations. The Bangladeshi government