Hong Kong is the world’s most crypto-ready country, according to a Forex Suggest report. The only country in Asia-Pacific to feature in the top 10 crypto-ready countries, Hong Kong secured a score of 8.6 out of 10, compared to a 7.7 score from its closest rival, the US, in second place.
This comes as legislation tailored to regulate the crypto space in Hong Kong aims to implement a licensing regime for crypto service providers.
Already renowned as a financial hub, the island nation topped the cryptocurrency charts thanks to its innovation in the crypto startup space and that it doesn’t tax capital gains on crypto, making it highly appealing to investors.
Hong Kong is Asian capital for crypto ATMs, despite recent restrictions
The city-state ranked in the top three for three of the categories analysed – including the number of blockchain startups per 100,000 people, and the number of crypto ATMs proportional to the population.
Thanks to its small land area, Hong Kong has the smallest area per crypto ATM with two crypto ATMs per 100,000 people, or 149 in total, meaning residents are never more than 7km away from an ATM.
This makes Hong Kong the Asian capital for crypto ATMs, although its status has recently come under threat as the Hong Kong Monetary Authority (HKMA) has restricted access to investing in digital assets to only professional investors.
However, despite recent instability in the sector in Hong Kong, HKMA’s CEO Eddie Yue recently told a meeting of G20 financial officials that cryptocurrency and DeFi would continue to play an important role “because the technology and the business innovation behind these developments are likely to be important for our future financial system”.
Hong Kong and Indonesia offer lowest crypto taxes in APAC
Hong Kong is one of seven countries, including Switzerland, Panama, Portugal, Germany, Malaysia and Turkey. sharing top spot for the lowest crypto taxes, which means any profits made from cryptocurrency trading are exempt from capital gains taxes for individuals.
Hong Kong regards cryptocurrencies as virtual commodities, not currency, so capital gains doesn’t apply. A similar stance is taken by Switzerland, which considers crypto a private wealth asset meaning it isn’t subject to capital gains tax. Malaysia doesn’t see crypto as either legal tender or a capital asset, leaving it tax-free for private investors, though if it is a regular source of income, it is subject to income taxes.
Indonesia takes second place worldwide for the lowest crypto taxes, charging private investors just 0.1% capital gains tax on their crypto profits. The country recently introduced this new tax (May 2022), to match its tax on shares as both are considered commodities.
Hong Kong has second most blockchain startups after Switzerland
While Switzerland takes top spot as the country with the most blockchain startups (12.9 per 100,000 residents, or 1,128 in total) thanks to the proactive approach taken by the Swiss financial authorities, Hong Kong takes second place.
The island nation has long been the financial hub of Asia and has played a key role in the development of now widespread blockchain technologies such as the stablecoin Tether. The city-state has 3 blockchain startups per 100,000 people.
When it comes to cryptocurrency interest, three countries from the APAC region feature in the top 10, with Australia topping the list and Hong Kong and Malaysia in eighth and ninth spot, respectively.
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