Where cryptocurrency is legal and illegal: countries to consider for starting a crypto business

As the global crypto industry continues to mature, regulatory clarity and government stance toward digital assets have become critical for entrepreneurs and investors. While some nations embrace cryptocurrency as a driver of innovation and financial inclusion, others impose strict bans or ambiguous regulations. In this article, we will explore countries where cryptocurrency is legal or banned, and highlight promising jurisdictions for launching a crypto business in 2025.

The global legal landscape

The legality of cryptocurrency varies widely across the globe. Some countries have fully embraced digital assets, integrating them into the financial system and supporting innovation, while others have outright banned their use due to concerns over financial stability, fraud, or capital flight.

Let’s break down the landscape into three main categories:

Crypto-friendly countries: supportive regulation and innovation hubs

These countries not only allow the use of cryptocurrencies but actively support crypto businesses and infrastructure development. They often have clear legal frameworks, crypto taxation guidelines, and government initiatives encouraging blockchain innovation.

El Salvador

El Salvador made global headlines in 2021 by adopting Bitcoin as legal tender alongside the US dollar. The country has since developed infrastructure such as the Chivo Wallet and plans for "Bitcoin City" to attract crypto entrepreneurs.

Central African Republic (CAR)

In 2022, CAR became the second country to legalize Bitcoin as legal tender. While infrastructure and adoption remain limited, this move signals openness to crypto innovation in Africa.

Germany

Germany recognizes cryptocurrencies as private money and treats them as assets for tax purposes. Berlin, in particular, is a hotspot for blockchain startups, with growing acceptance of crypto payments in stores, cafés, and online platforms.

Switzerland

Known for its “Crypto Valley” in the canton of Zug, Switzerland offers a favorable regulatory environment, low taxes, and crypto-friendly government services. Bitcoin and Ether are accepted for both retail purchases and public services in some regions.

Japan

One of the first countries to regulate cryptocurrencies, Japan treats Bitcoin as legal property and has licensed crypto exchanges. Major retailers like Bic Camera accept Bitcoin, and the government actively monitors the sector for transparency and security.

Portugal

Portugal has earned a reputation as a tax-friendly crypto destination. Some restaurants, hotels, and rental properties accept Bitcoin. While tax rules have tightened slightly, the country remains attractive for digital nomads and crypto businesses.

United States

The U.S. has a complex but open stance toward cryptocurrencies. While federal agencies regulate digital assets differently, states like Wyoming, Texas, and Florida have adopted crypto-friendly legislation, making them hotspots for innovation and mining operations.

Canada

Canada allows cryptocurrency use and investment, with exchanges registered under federal financial regulators. Cities like Toronto and Vancouver have thriving crypto communities, with businesses increasingly accepting Bitcoin.

United Arab Emirates (Dubai)

Dubai stands out in the Middle East for its proactive crypto strategy. It has established regulatory bodies like VARA (Virtual Assets Regulatory Authority) and offers a welcoming environment for blockchain startups, with luxury retailers and even real estate firms accepting crypto payments.

Australia

Bitcoin and other cryptocurrencies are legal in Australia and treated as property for tax purposes. Thanks to an established crypto ecosystem and a network of merchants accepting digital assets, crypto can be used in everyday transactions.

Cautious or restricted countries: unclear or evolving rules

These countries have not banned cryptocurrencies outright but impose restrictions on usage, trading, or taxation. Regulatory frameworks are often still under development, making these markets riskier for business.

• India has vacillated between restrictive and open policies, with high crypto taxes and potential regulatory overhauls on the horizon.

• Turkey allows crypto trading but has banned their use for direct payments.

• Russia permits crypto investment but prohibits using it as a legal payment method.

• Brazil is working on comprehensive crypto laws, with growing adoption and political support.

Such countries can offer long-term potential if regulations become clearer, but they currently carry higher legal and operational risks.

Crypto-banned countries: legal prohibitions and enforcement

In some nations, cryptocurrencies are outright banned, either for trading, usage, or mining. These countries pose significant legal risks for businesses and investors.

• China banned all crypto transactions and mining in 2021, citing financial risks and environmental concerns.

• Algeria, Bangladesh, and Morocco have prohibited crypto use under their financial or anti-terrorism laws.

• Bolivia and Nepal also restrict all forms of crypto transactions.

Businesses should avoid these jurisdictions unless there are signs of policy shifts or exceptions for blockchain-related ventures.

Countries to watch in 2025 for launching a crypto business

Several jurisdictions are showing strong signs of becoming global leaders in the crypto space. If you're planning to start a crypto-related venture, consider these countries:

• Switzerland – for institutional-friendly laws, startup ecosystem, and regulatory clarity.

• Portugal – for its crypto taxation regime and growing expat-friendly environment.

• UAE (Dubai) – for supportive government policies, a favorable business environment, and • strategic location.

• Germany – for a stable legal system and increasing adoption in retail and finance.

• Japan – for long-term regulatory experience and a large domestic market.

• El Salvador – for its first-mover advantage, pro-Bitcoin stance, and government incentives.

Conclusion

The global crypto regulatory map is constantly shifting. While some countries push innovation forward with open arms, others approach crypto with skepticism or outright bans. For crypto entrepreneurs, staying informed about each country’s legal and regulatory environment is crucial.

Choosing the right jurisdiction can make or break your business. Look for countries with:

• Clear, supportive legislation

• Tax advantages

• Access to crypto talent and infrastructure

• Political and economic stability

As we move through 2025, keeping an eye on these evolving legal landscapes will help you position your business for long-term success in the ever-expanding crypto economy.