In recent years, governments of several countries around the world have been taking keen interest in crypto in order to understand the dynamics of digital currency and how they could integrate it into their financial sectors.
While there are negative reports from some governments, including the US, Japan and the UK, other countries and governments especially in the east are deep diving into crypto in full flight. These governments are allowing crypto to become part of the mainstream finance system in their countries through Crypto-friendly policies and frameworks that can enable crypto and related businesses thrive.
In this post, we will look at three of such governments or countries with a heavy focus on crypto-economy in their respective jurisdictions.
1. United Arab Emirates
United Arab Emirates, an eastern country known for its pro-crypto stance, began embracing crypto from 2018. That's the year they initiated a blockchain project coined "Strategy 2021". In 2022, they broke the news of a new federal license for Virtual Assets Service Providers (VASPs). This includes crypto exchanges dotted across the nation.
As a result of this federal license, the country saw a surge in crypto-related startups and businesses. Places such as international schools and hotels now accept crypto payments. Government bodies aren't left out either. They’ve started exploring the metaverse and NFTs. One standout example is the UAE Ministry of Economic's virtual headquarters in the metaverse.
Today, over 1500 crypto businesses are based in the UAE, with most in Dubai, one of its wealthiest Emirates.
In the UAE, the crypto space is thriving without restrictions holding back individuals or companies from digital assets. The primary minor problem for crypto traders here is banking access. Yet, this doesn't stop the dedicated crypto enthusiasts and investors from continuing their trade.
It will be too early to deduce if the UAE government could impact the crypto market significantly. But, the general outlook for crypto in this country is assuredly optimistic.
2. Saudi Arabia
The Saudi Arabia government was once a strong anti-crypto government. This was evident in 2018 when banks were forbidden from handling crypto transactions. In addition, the government officially labeled cryptocurrency as illegal.
Interestingly, there were no consequences for those trading crypto during the ban. This lack of repercussions encouraged more Saudi citizens to continue trading and holding crypto, despite the government's ban.
In May 2022, kuCoin, a well-known crypto exchange, reported after a survey that nearly 14% of adults had interacted with crypto in some way within half a year. Additionally, 17% expressed interest. This surge of crypto popularity resulted in the creation of the Halal-Approved crypto, a major news highlight in the crypto world, about two years ago.
Saudi Arabia, in an effort to manage and set parameters around crypto activities, announced that they've hired crypto experts to their policy making team. These experts will study crypto interactions and contribute to policy-making. Additionally, Binance has been servicing clients in the country, suggesting the government may soon adopt crypto-friendly regulations.
Also, last February, a significant crypto project partnership was formed between the Saudi Arabia government and The Sandbox. The project is metaverse-related. While it's premature to say that Saudi Arabia is entirely pro-crypto, we can't dismiss the potential of it becoming a major crypto center in the coming years.
3. France
France frequently draws attention as a thriving center for cryptocurrency in Europe. Their President, Emmanuel Macron, has been an active advocate for crypto. In May 2022, Binance, a notable player in crypto, got official permission to conduct business in France. This marked a change for the exchange, which had faced challenges in various parts of Europe. By September 2022, key players in France started to notice this movement. Even a top French bank started handling cryptocurrency for significant investors. The outcome led to the issuance of legal license to bank to expand its crypto activities.
Also, Binance made a deal with a crypto payment company to test crypto payments in the country. This happened when the government announced changes to crypto regulations. Moreover, Circle, the maker of USDC stablecoin, chose to put its European headquarters in France. Picking France as headquarters was good news for crypto users in the country.
Conclusion
In conclusion, the outlook for crypto in the countries mentioned in this post remains bullish as the governments have laid a solid foundation in a way to create conditions that will encourage more people in those countries to engage with crypto. While they have not yet made the move to create CBDC, there is no denying that the pressure for crypto increases as more people are interested in it than ever before.
An entry for today's #februaryinleo prompt "Government and cryptocurrency" tagged #cryptomonday.