Crypto Champions of 2022: Which Countries Bravely Embraced Digital Assets?

2022 was a rollercoaster for the crypto world. Amidst market crashes and public skepticism, it felt like regulators and policymakers were ready to throw in the towel on digital assets. But guess what? Against the tide of negativity, some nations not only kept the faith but doubled down on crypto innovation. Let’s dive into the countries that stood out as beacons of crypto progress in 2022, proving that even in a bear market, belief in digital assets can thrive.

Who were the crypto champions of 2022?

While many were hitting the brakes on crypto, these countries were stepping on the gas, each in their own unique way:

• Brazil: From legalizing crypto payments to building a robust regulatory framework, Brazil made significant strides.
• United Kingdom: Despite political turbulence, the UK diligently worked on laying the groundwork for crypto regulation, aiming to become a global hub.
• El Salvador: Continuing its bold Bitcoin experiment, El Salvador remained a fascinating case study in crypto adoption.
• Central African Republic (CAR): In a surprising move, CAR legalized cryptocurrency use, pushing the boundaries of financial innovation.
• United Arab Emirates (UAE): With strategic regulation and a focus on the metaverse, the UAE positioned itself as a crypto-friendly destination.

Brazil: Sambaing into Crypto Regulation

Brazil, a nation known for its vibrant culture and passion, added another feather to its cap by embracing crypto in 2022. Even with impressive crypto adoption already in 2021, Brazil formalized its commitment with a dedicated regulatory framework.

In a move that signaled growing acceptance, former President Jair Bolsonaro signed a bill into law just before leaving office, officially legalizing crypto payments across the country. This wasn’t about making Bitcoin legal tender like El Salvador, but rather about creating a clear and welcoming environment for digital currencies. The bill defined what digital currencies are and set up a licensing system for Virtual Asset Service Providers (VASPs), ensuring consumer protection and market integrity.

Why was this bill so timely for Brazil?

The timing was perfect. By August 2022, Brazil’s tax authority was already tracking significant crypto activity, with a remarkable 12,053 companies declaring crypto holdings on their balance sheets. This demonstrates the already substantial integration of crypto into the Brazilian economy and the need for clear regulatory guidelines.

Further solidifying its crypto-friendly stance, the Brazilian Stock Exchange took a leap forward by announcing Bitcoin futures trading in May. Unlike the limited options in the US, both institutional and retail investors in Brazil enjoy trading a diverse range of 11 cryptocurrency ETFs on the Brazilian Exchange. This accessibility to crypto investment products underscores Brazil’s progressive approach.

United Kingdom: Navigating Regulation in Turbulent Times

The UK faced a year of significant change in 2022, marked by national mourning and political shifts. Despite the passing of Queen Elizabeth II and the rapid succession of Prime Ministers, the UK government remained focused on the important task of crypto regulation. While the journey wasn’t without its bumps, the UK’s efforts present a compelling case for national-level crypto frameworks.

A key piece of legislation, the Financial Services and Markets Bill introduced in July, clearly signaled the UK’s ambition to become a global cryptocurrency hub. This bill broadened regulations around stablecoins and introduced the concept of Digital Settlement Assets (DSAs). It empowered the Treasury to oversee DSA payments, service providers, and even insolvency arrangements, creating a comprehensive regulatory net.

Adding another layer of security, the Economic Crime and Corporate Transparency Bill proposed in May aimed to enhance the ability to “more quickly and easily seize and recover crypto assets.” This measure is crucial for protecting victims of ransomware and other cybercrimes, demonstrating a proactive approach to crypto-related crime.

NFTs as Private Property? A UK Legal First!

In a landmark moment for the UK’s Web3 community, the London High Court of Justice, the UK’s highest court, declared Non-Fungible Tokens (NFTs) as “private property.” This legal precedent is a significant win for NFT owners, providing them with stronger legal standing and clarity regarding ownership rights.

In a move that resonated with the crypto industry’s concerns about overreach, the UK Treasury also scaled back data collection requirements for crypto transactions involving unhosted wallets. Unless a transaction presented a “high risk of illicit finance,” senders and recipients of crypto sent to unhosted wallets would face less stringent data collection. Furthermore, by the end of 2022, the UK government extended the Investment Manager Exemption to “designated crypto assets,” a welcome development for crypto investors.

El Salvador: The Bitcoin Experiment Continues

El Salvador, which made headlines in 2021 by adopting Bitcoin as legal tender, deserves recognition for its continued commitment in 2022. President Nayib Bukele’s government persisted with its ambitious “Bitcoin bonds” plan, aimed at raising funds for infrastructure projects and the much-discussed “Bitcoin City.”

Despite initial announcements, the Bitcoin bond issuance faced delays in March and September. Economy Minister Maria Luisa Hayem Brevé introduced a bill in November to reaffirm the government’s intention to raise $1 billion and proceed with the Bitcoin City project. As of now, further updates on the bill’s progress are awaited, but El Salvador’s dedication to its Bitcoin vision remains unwavering.

El Salvador: A Living Bitcoin Lab

Regardless of the bond’s immediate success, El Salvador continues to serve as a vital “Bitcoin adoption lab.” Tourism saw a 30% increase after the Bitcoin law was enacted in September 2021, as reported by Tourism Minister Morena Valdez. A 2022 study by the National Bureau of Economic Research (NBER) also revealed that 20% of businesses in El Salvador now accept Bitcoin as payment, indicating growing real-world usage.

El Salvador’s influence extended beyond its borders. In May, the country hosted a three-day conference for central bankers from 44 developing nations. The focus? Financial inclusion and, of course, Bitcoin. Central banking representatives from countries spanning Ghana to Burundi, Jordan to the Maldives, and Pakistan to Costa Rica attended, highlighting El Salvador’s role in fostering global dialogue around crypto.

Central African Republic: A Bold Move into Crypto Territory

The Central African Republic (CAR) surprised the world in April by legalizing cryptocurrency use in financial markets. Lawmakers unanimously passed a bill that allows the use of cryptocurrencies for payments, including taxes, through authorized entities. CAR also launched its local central bank digital currency (CBDC), Sango Coin, in July, with ambitious goals to raise nearly $1 billion within a year. So far, Sango Coin sales have reached $1.66 million.

In an even bolder move, CAR initially offered citizenship to foreign investors for a $60,000 investment in Sango Coins. However, this initiative was later declared unconstitutional by the country’s top court, highlighting the legal and regulatory complexities of such innovative programs.

The adoption of crypto in CAR faced opposition from the Bank of Central African States (BEAC), which cited concerns about the “substantial negative impact” on the Central African monetary union. This opposition underscores the challenges of regional monetary policy in the face of individual nations embracing decentralized currencies.

UAE: Strategically Building a Crypto and Metaverse Hub

The United Arab Emirates (UAE) made a strategic and calculated move into the crypto space in 2022, attracting global investors with clear and forward-thinking regulation. This isn’t the UAE’s first rodeo in the crypto spotlight – earning them another mention in Cointelegraph’s listicle.

Dubai’s crypto law, enacted in March, focused on investor protection and aimed to establish “much-warranted international standards” for crypto industry governance. The newly established Dubai Virtual Asset Regulatory Authority (VARA) was granted enforcement powers within Dubai’s special development and free zones (excluding the Dubai International Financial Centre). Notably, one of the first licenses issued by VARA went to FTX, ironically, before the exchange’s collapse later in the year.

Abu Dhabi also contributed to the UAE’s crypto ambition by proposing drafts for NFT trading regulations. These drafts classified NFTs as intellectual property rather than “specified investments or financial instruments,” paving the way for Multi-Trading Facilities (MTFs) and Virtual Asset Custodians (VACs) to operate NFT marketplaces.

Dubai: Leaping into the Metaverse

The UAE’s vision extends beyond crypto to the metaverse. Dubai launched the Dubai Metaverse Strategy in July, aiming to become one of the world’s top 10 metaverse economies. This strategy includes initiatives like R&D collaborations to boost the metaverse’s economic impact, accelerators and incubators to attract international metaverse companies and projects, and metaverse-focused education for developers, content creators, and users.

Adding a tangible dimension to its metaverse ambitions, Dubai also launched Sharjahverse, described as a “photorealistic, physics-accurate” metaverse spanning 1,000 square miles. This virtual city is envisioned to boost tourism and create new metaverse-related employment opportunities.

Looking Ahead: More Crypto Progress on the Horizon?

Overall, 2022 demonstrated a surprisingly positive trend in crypto regulation, with several countries actively working to create frameworks that foster innovation while addressing risks. As we look to the future, the race to establish comprehensive crypto frameworks in major economies like the U.S., coupled with potential liberalization in regions like Hong Kong and South Korea, suggests that the coming years will be even more exciting for the global crypto landscape. The groundwork laid in 2022 by these crypto-championing nations sets the stage for further growth and mainstream adoption of digital assets worldwide.