The adoption of blockchain technology has caused plenty of hype, hitting the headlines and attracting the attention of many business leaders and lawmakers. But even though the technology is exciting and has tremendous potential, there are several challenges that make people hesitant about welcoming the change. Most challenges stem from technological inefficiencies, a lack of regulation, and limited knowledge and awareness that results in a lack of trust.
But by shedding more light on the technology and its core functions, we can overcome these challenges and help blockchain achieve widespread adoption, becoming a universally accepted instrument used in finance, identity verification, management, healthcare, and many other spheres.
The experts at Grapherex tell us which countries have already accepted blockchain systems on a governmental level and establish to what extent they have done so.
Who Leads Blockchain Adoption?
Blockchain communities consist of individuals, organisations, and businesses that collaborate to develop and utilise blockchain technology. They share knowledge, work on projects, and promote blockchain adoption.
Roles of different blockchain communities:
- Developer communities create blockchain-based projects, including protocols, smart contracts, and programs.
- Industry communities focus on developing solutions for specific industries or sectors, for example, finance, healthcare and supply chain management, and handling issues related to their areas.
- User communities are made up of individuals who use blockchain goods or services and provide feedback to improve them.
- Investment communities invest in blockchain-based ventures like crypto startups and share knowledge about potential investment opportunities.
- Social impact communities leverage blockchain technology to address social and environmental problems, working together to create a more sustainable and equitable world.
Countries Leading Blockchain Adoption
The potential benefits of blockchain technology include increased productivity, security, and transparency, as well as reduced costs, speed, and improved customer experiences. That’s why not only private companies but also whole countries go for extensive adoption. Let’s see the leaders in this race.
The No.1 country in terms of implementing new decentralised technologies in governmental processes is El Salvador. Being the first nation to recognise Bitcoin as a legal tender, the county demonstrates its commitment to promoting financial inclusion for its citizens. This move might also attract international investors, as President Nayib Bukele has noted.
The government has taken several steps to encourage the adoption of Bitcoin, including creating a $150 million trust fund and introducing a Chivo wallet in 2021, along with establishing a network of crypto ATMs to make money transfers easier. During the crypto market crash in 2022, President Bukele pledged to continue purchasing one BTC per day to demonstrate the government’s support for these digital assets.
Portugal is actively creating a supportive environment for blockchain and cryptocurrency companies. The government takes proactive measures: it uses blockchain technology in public services and healthcare and even introduced the Blockchain Panorama platform in 2019 to simplify information exchange.
The country’s policies attract crypto enthusiasts who can now use BTC to pay bills and taxes. The adoption by merchants is also increasing, and seeing a Bitcoin ATM is no longer an astonishing novelty. In 2021, the government established technological free zones (ZLTs) to encourage tech-based innovation. However, Portugal has also introduced stricter rules on crypto taxes, following the laws of other European countries, and in 2022, the government repealed a tax law that excluded income from cryptocurrencies.
Singapore is a country that has established guidelines to support the growth of the blockchain industry, making the country a sought-after location for setting up new blockchain-based businesses and initial coin offerings (ICOs). As a Smart Nation, Singapore is transforming into a research hub.
The government is business-friendly and transparent, with an accommodating approach to blockchain development. The Monetary Authority of Singapore is also pioneering decentralised payment solutions between banks while mitigating associated risks. Recent surveys show a high level of interest, trust, and confidence in the future of cryptocurrency and blockchain among Singaporeans.
Malta gained the name “blockchain island” in 2017 when it introduced regulations to boost blockchain growth. A year later, the country’s parliament passed laws to regulate digital currencies and ICOs. E-money and utility tokens are excluded from the capital gains tax; meanwhile, securities and virtual financial assets are subject to taxation.
In 2021, the Maltese government stated that blockchain and AI are an integral part of their commercial guide prospect. Additionally, the government aims to incentivise international businesses to establish themselves in Malta for testing and operating blockchain technology.
However, due to increased scrutiny and local political and economic events, the results are not as amazing as they were said to be. But some blockchain and crypto-focused businesses are still thriving, including those utilising blockchain in supply chain management for wine and olive oil.
The UAE is an emerging crypto hub in the Middle East. In contrast to their European counterparts, who have faced setbacks in their efforts to regulate the crypto industry, the independent regulators in the UAE act swiftly to establish favourable regulatory conditions for global crypto companies.
The Emirates Blockchain Strategy 2021 was launched by the government in April 2018 with the aim of transforming the region into a smart zone. This means the integration of blockchain technology to facilitate more effective government services and business operations.
The UAE is a digital innovation hotspot that embraces blockchain as a means of saving time, money, and other resources. The government is also actively encouraging innovation in emerging areas, including metaverse and NFT marketplaces, through simple and welcoming policies.
Other Countries with High Adoption Rates
While the countries listed above are far ahead of the global tendency, there are many more nations that embrace innovation but still put some pressure on the industry so that it remains under control.
Almost 40% of global blockchain startups are located in the US. The United States integrates technology into its standard systems by setting up research associations and introducing crypto ATMs. Montana and Texas are considered the most welcoming locations for blockchain-based startups.
While an ultimate legal approach has not yet been developed at the state or federal level, the government is on its way to developing a more precise regulatory framework for cryptocurrencies to encourage adoption. What’s more, the government of the United States plans to increase investment in blockchain development in the next few years.
Switzerland is one of the most exciting countries to watch in the blockchain space. The country welcomed crypto payments in 2016 with a pro-crypto regulatory framework that encourages businesses to settle in this area. The small town of Zug in Switzerland is home to over 450 blockchain-based associations and companies.
The national parliament has recognised Bitcoin as a legitimate currency, which has increased the level of cryptocurrency activities in the country. Blockchain technology is planned to be integrated into insurance, finance, logistics, and medical care in the near future.
The Swiss have a high level of knowledge about blockchain. We believe that this is key to accelerating adoption. If you also want to learn more about the crypto industry, check out the Grapherex blog.
The blockchain market is unique. Many countries are adopting blockchain technology, with more expected to follow. Blockchain is expected to grow, but it would be different from the expansion of the internet. While some countries are embracing technology, others are more sceptical. Nevertheless, all recognise the development potential of blockchain.