The level of freedoms that the U.S. has provides an argument for the country as the most crypto-friendly location, although Puerto Rico also has its benefits.
As a burgeoning industry less than 13 years old, cryptocurrency has seen its fair share of regulatory crackdowns and changes, especially in the United States. Jake Yocom-Piatt, co-founder of Decred, however, sees the nation as the most crypto-friendly.
“Cryptocurrencies are treated as personal property in most jurisdictions, so their tax treatment is relatively uniform,” Yocom-Piatt said. He continued:
“Cryptocurrency transactions are a form of speech, so states where free speech is protected are the least likely to restrict cryptocurrencies. While the U.S. currently suffers from many substantial sociopolitical problems, the combination of its freedom of speech with protections against forced disclosure of passphrases makes it the most crypto-friendly country in the world.”
Since 2017, the crypto industry has suffered a number of regulatory actions from U.S. regulators, from initial coin offering lawsuits to charges against companies such as BitMEX. The nation’s Department of Justice has also recently put out crypto regulatory parameters.
Earlier this year, U.S. Representative Tom Emmer expressed apprehension about the U.S. hurting innovative progress amid its legal processes and requirements. Yocom-Piatt’s view of the U.S. as the most crypto-friendly county, however, looks at the situation from a different angle, noting the country’s freedoms rather than its restrictions.
Meanwhile, Rob Viglione, co-founder and CEO of Horizen, told Cointelegraph, that he sees Puerto Rico as the top place for crypto, although he answered the question in light of the best crypto location for U.S. persons. “I’m going to nominate a country that’s not always recognized as a country and is way underrated as a crypto hotspot: Puerto Rico!” He added:
“For Americans, Puerto Rico is, by far, the most crypto-friendly jurisdiction when you consider special tax decrees, like Acts 20 or 22, which drive effective tax rates way down.”
The U.S. Internal Revenue Service issued guidance on digital asset taxation for its citizens in 2019, although it brought further questions. Other updates have also occurred, including changes to crypto tax reporting forms.
One other complicated component of U.S. crypto taxation: Crypto is not viewed as property, so users must report every trade as a gain or loss, contrary to like-kind exemptions. But tax aspects aside, Puerto Rico hosts a strong cryptocurrency scene, according to Viglione:
“Saving on taxes is great, but what really makes Puerto Rico stand out is the explosion of the most vibrant crypto community in the world because of it. Many of the industry’s leaders, entrepreneurs, and developers have chosen Puerto Rico as their new home.”
Kosala Hemachandra, founder and CEO of MyEtherWallet, also recently gave his take on what he sees as the best region for crypto. Hemachandra posited people’s views on a good crypto atmosphere can be subjective. He also mentioned the importance of a global crypto presence.