The expression "Bitcoin City" regularly bursts onto the media scene. A good dozen cities in the world want to claim the title of “Bitcoin city”, while several small countries have made bitcoin an official currency and “crypto-paradise” projects are multiplying.
Initiatives that reveal disparities in the adoption of cryptocurrencies, against the backdrop of controversial regulation.
Pioneers and forerunners: crypto localism
For many years, various public or private initiatives have sought, around the world, to facilitate the adoption of Bitcoin at the local or regional level.
We have thus seen the emergence, particularly in the Netherlands, the United States and France, of “Boulevards Bitcoin”: streets or entire neighborhoods where the majority of businesses jointly decided to accept crypto-currency as a method of payment. Initiatives publicized, but not always crowned with success. The Parisian "Boulevard Bitcoin", inaugurated at the end of 2016 , was considered a " semi-failure " four years later.
Despite everything, the precursors in the field will have marked the spirits. As early as 2015, the small town of Arnhem in the Netherlands was thus often considered the first "Bitcoin City" for seeking to democratize cryptocurrency among traders. A few countries also adopted very early legislation deemed favorable to crypto-currencies, to the point of appearing as so many “crypto-territories”. Malta, one of the first European countries to pass such laws in 2018, has sometimes been dubbed "blockchain island"
All these designations, sometimes symbolic, have however often remained anecdotal. Today there are few Bitcoin ATMs or businesses accepting crypto-currencies in Malta and, conversely, just because a few dozen businesses accept crypto-currency does not mean that their city can self-proclaimed “Bitcoin City”.
Salvador, bitcoin country
But things accelerated sharply in September 2021 with the national adoption of bitcoin by El Salvador, a Central American country of 6.5 million people and the first country in the world to make bitcoin an official currency . The President of El Salvador, Nayib Bukele, is full of praise for the world's first crypto-currency, and intends to make it the keystone of his economic and social policy.
Highly commented on and sharply criticized by several international institutions, including the International Monetary Fund, which sees in it "a significant risk for financial stability, financial integrity and consumer protection" , El Salvador's decision is a cobblestone in the pond. But the president of the country persists in sign. “What international organizations have called the 'Bitcoin Experiment' is nothing more than the world watching how mass adoption [of Bitcoin] transforms a country's economy. If it works, fiat currencies [traditional currencies, like the dollar or the euro] are gone. El Salvador is the spark that ignites the real revolution,” he wrote on Twitter last December.
Bitcoin Cities and Crypto Countries: A Chaotic Road to Bitcoin Mass Adoption?
El Salvador's approach translates into multiple actions to democratize Bitcoin and generalize its use: development of a national electronic wallet (Chivo), Bitcoin ATMs, regular purchase of bitcoins for national reserves... And Bukele also intends create a real "Bitcoin City" , near the border of Honduras. Particularly characterized by Bitcoin mining using geothermal energy drawn from the heart of a volcano, the new city would be both ecological and technological, promises the president. The project, which involves the issuance of bonds denominated in bitcoins to the tune of a billion dollars, has however been delayed and today arouses some skepticism .
Anyway, its adoption as an official currency is a key step in the history of Bitcoin and will undoubtedly have helped to move the lines. Other countries seem inclined to follow El Salvador's example.
In April 2022, the Central African Republic, 6 million inhabitants and one of the poorest countries in the world, becomes the second country to adopt bitcoin as legal tender , alongside the CFA franc. And the pressure is increasing in several places around the world to expand, even free, the use of Bitcoin and crypto-currencies. In Mexico, "We must make Bitcoin a legal currency", believes for example Senator Indira Kempis, who intends to introduce a bill in this direction this year.
The era of mayors-crypto
Apart from these national initiatives, there is a growing enthusiasm for the world's first crypto-currency, in particular on the part of the mayors of several large cities.
Bitcoin
The expression "Bitcoin City" regularly bursts onto the media scene. A good dozen cities in the world want to claim the title of “Bitcoin city”, while several small countries have made bitcoin an official currency and “crypto-paradise” projects are multiplying.
Initiatives that reveal disparities in the adoption of cryptocurrencies, against the backdrop of controversial regulation.
Pioneers and forerunners: crypto localism
For many years, various public or private initiatives have sought, around the world, to facilitate the adoption of Bitcoin at the local or regional level.
We have thus seen the emergence, particularly in the Netherlands, the United States and France, of “Boulevards Bitcoin”: streets or entire neighborhoods where the majority of businesses jointly decided to accept crypto-currency as a method of payment. Initiatives publicized, but not always crowned with success. The Parisian "Boulevard Bitcoin", inaugurated at the end of 2016 , was considered a " semi-failure " four years later.
Despite everything, the precursors in the field will have marked the spirits. As early as 2015, the small town of Arnhem in the Netherlands was thus often considered the first "Bitcoin City" for seeking to democratize cryptocurrency among traders. A few countries also adopted very early legislation deemed favorable to crypto-currencies, to the point of appearing as so many “crypto-territories”. Malta, one of the first European countries to pass such laws in 2018, has sometimes been dubbed "blockchain island" .
All these designations, sometimes symbolic, have however often remained anecdotal. Today there are few Bitcoin ATMs or businesses accepting crypto-currencies in Malta and, conversely, just because a few dozen businesses accept crypto-currency does not mean that their city can self-proclaimed “Bitcoin City”.
BitcoinCity_Salvador
The President of El Salvador, presenting his "Bitcoin City" project
Salvador, bitcoin country
But things accelerated sharply in September 2021 with the national adoption of bitcoin by El Salvador, a Central American country of 6.5 million people and the first country in the world to make bitcoin an official currency . The President of El Salvador, Nayib Bukele, is full of praise for the world's first crypto-currency, and intends to make it the keystone of his economic and social policy.
Highly commented on and sharply criticized by several international institutions, including the International Monetary Fund, which sees in it "a significant risk for financial stability, financial integrity and consumer protection" , El Salvador's decision is a cobblestone in the pond. But the president of the country persists in sign. “What international organizations have called the 'Bitcoin Experiment' is nothing more than the world watching how mass adoption [of Bitcoin] transforms a country's economy. If it works, fiat currencies [traditional currencies, like the dollar or the euro] are gone. El Salvador is the spark that ignites the real revolution,” he wrote on Twitter last December.
El Salvador's approach translates into multiple actions to democratize Bitcoin and generalize its use: development of a national electronic wallet (Chivo), Bitcoin ATMs, regular purchase of bitcoins for national reserves... And Bukele also intends create a real "Bitcoin City" , near the border of Honduras. Particularly characterized by Bitcoin mining using geothermal energy drawn from the heart of a volcano, the new city would be both ecological and technological, promises the president. The project, which involves the issuance of bonds denominated in bitcoins to the tune of a billion dollars, has however been delayed and today arouses some skepticism .
Anyway, its adoption as an official currency is a key step in the history of Bitcoin and will undoubtedly have helped to move the lines. Other countries seem inclined to follow El Salvador's example.
In April 2022, the Central African Republic, 6 million inhabitants and one of the poorest countries in the world, becomes the second country to adopt bitcoin as legal tender , alongside the CFA franc. And the pressure is increasing in several places around the world to expand, even free, the use of Bitcoin and crypto-currencies. In Mexico, "We must make Bitcoin a legal currency", believes for example Senator Indira Kempis, who intends to introduce a bill in this direction this year.
The era of mayors-crypto
Apart from these national initiatives, there is a growing enthusiasm for the world's first crypto-currency, in particular on the part of the mayors of several large cities.
The movement is particularly visible in the United States. “Crypto mayors are on the rise , ” TechCrunch headlined last December, noting that “while bitcoin, blockchain, and NFT aren’t terms usually heard at town halls, they increasingly are in cities like Miami. , Tampa, New York or Jackson, because the mayors of these cities have made markers of them” .
In Miami, Mayor Francis Suarez (Republican) intends to make his city “ the Bitcoin capital of the world ”. While the city's official website houses a copy of the " Bitcoin PDF ," the cryptocurrency's founding document, its mayor is particularly proactive in facilitating its adoption. Willing to speak at international conferences dedicated to Bitcoin, he assured from the beginning of 2021 that he wanted to "explore the payment of municipal employees in bitcoins and invest part of the city's treasury in Bitcoin" . At the end of 2021, the city gave $1,000 in bitcoinsto each of the 55 black students enrolled in an excellence competition, and Suarez announced that he wanted to convert part of his own retirement fund into bitcoins. More generally, the State of Florida (of which Miami is the 2nd most populous city) is also openly "pro-crypto", according to its governor who wants medical insurance expenses and vehicle registration fees can be paid in cryptocurrencies .
Almost similar posture in New York where, despite past regulations deemed unfavorable to cryptos, part of the salary of Mayor Eric Adams (Democrat) has now been converted into crypto-currencies (BTC and ETH) since the beginning of 2022. A highly publicized approach besides -Atlantique, which is part of a discourse strongly favorable to cryptos and the stated intention of making the “Big Apple” a bitcoin capital. "New York is the center of the world and we want it to also be the center of cryptocurrencies and other financial innovations," the mayor said.
In any case, this recent love for Bitcoin and cryptos from the mayors of some of America's biggest cities undeniably comes with a political message.
"Bitcoin has the power to democratize wealth and create it for the unbanked and poor, who are being decimated by inflation and uncontrolled government spending" , estimated the mayor of Miami at the beginning of April 2022 , even advancing that "the next president of the United States, in 2024, must be a pro-Bitcoin candidate” . For the mayor of New York, cryptos are above all synonymous with the creation of value. "Being at the forefront of this innovation will help us create jobs, improve our economy and continue to attract talent from around the world," he said in January 2022 .
Cities and towns, even (crypto) fight
In addition to the United States, there are similar approaches in several places around the world.
Since the beginning of 2022, Rio de Janeiro, 2nd city in Brazil and 19th most populous in the world, converts 1% of its cash reserves into cryptos . "We know that bitcoin is volatile, and some blame us for it, but it's the future, and Rio wants to be a reference for the world as a crypto-friendly city, like Miami in the United States or Zug. in Switzerland” , commented Chicão Bulhões, responsible for the economic development of the city. For him, making Rio a "crypto hub" is logical and even necessary to counter the effects of inflation. And the approach translates into concrete actions: in March 2022, the mayor of Rio announced that the citizens of the city will be able to pay theirreal estate taxes in cryptocurrencies from 2023 – a first in the country.
There are also crypto initiatives in much smaller cities or territories.
Borgo d'Anaunia, a small village of 2,500 people in the Italian Alps, has become the first municipality in Italy to install a data center within a hydroelectric power plant, and to mine bitcoins there. As the mayor of the village explains , the installation makes it possible to overcome the intermittences inherent in renewable energy, to make it more profitable: "When the winter is drier than usual, so the quantity of water brought by the very weak river, this new technology allows us to maximize production and therefore to further enhance our installation” .
Same decision in Sorradino, a village of 6,000 inhabitants in Argentina, where the municipality has just acquired graphics cards to mine crypto-currencies itself, and counter the effects of inflation and the economic crisis, according to its mayor . .
Crypto paradise in the sun
Added to all this are the desire to create, almost ex nihilo , more or less independent territories largely based on crypto-currencies, often in the middle of the ocean.
These can be private development projects of limited size, such as in Bequia, a small island in the Grenadines, where the One Bequia project has prided itself since 2021 on being “ the first real estate developer in the Caribbean accepting Bitcoin” . Cryptocurrency can be used within the residential complex to buy property and also pay for daily shopping and other restaurants, cafes and cinema.
These are sometimes also more ambitious projects based on the specific legislative status enjoyed by certain islands. The idea of forming such “crypto-paradises” and other “Bitcoin islands” is not new, and several such projects have failed in the past. But at least two projects seem on track to succeed.
Roatan, an 83 km 2 island off the coast of Honduras in the Caribbean Sea, for example, has established a partnership with the company Prospera with a view to making the territory "a hub for sustainable economic development" . In practice, the area is semi-autonomous, while being anchored in the Honduran Constitution.
The president of Prospera, the American Joel Bomgar, both entrepreneur and member of the Mississippi House of Representatives, does not hide his attraction to Bitcoin. “I am a huge bitcoin fan. I firmly believe that it will one day be the universal and global reserve currency for the world” , he launched on Twitter in 2021 . Logically, Roatan will indeed be an area leveraging cryptocurrency. “Within Prospera , Bitcoin functions as legal tender. This means there is no capital gains tax on BTC, you can transact freely using Bitcoin, and you can pay taxes and fees to the jurisdiction in bitcoins ,” Bomgar announced in April 2022..
Elsewhere, very far from there, another tropical paradise is also preparing to shelter an “island of cryptos”. Within Vanuatu, an archipelago in the Pacific Ocean a few hundred kilometers from New Caledonia, a “Satoshi Island” ( Satoshi Island ) will soon be installed, named after Satoshi Nakamoto, creator of Bitcoin. The project, led by an independent company, consists of transforming a private island in the archipelago into "the home of professionals and cryptocurrency enthusiasts, with the aim of being considered the world's crypto capital". .
After obtaining official approval from the Prime Minister of Vanuatu in April 2022, Satoshi Island could begin to welcome its first residents in 2023. It will house a maximum of 21,000, even if more than 50,000 Internet users have already expressed their interest in acquiring a dedicated NFT (possession of the NFT will confer specific rights and a sort of “local citizenship” unique to the island, but distinct from citizenship of the Republic of Vanuatu proper). Here too, the project is anchored in a logic of sustainable development and respect for the environment: housing and offices will, for example, only be made up of pre-fabricated modules, powered by solar energy and treating wastewater.
Figures and studies: contrasting rankings
Concretely, apart from postures and declarations of intent, it is not so easy to distinguish which places in the world are the most "crypto-friendly" or truly deserve the name of "country of bitcoin". On the basis of various statistics and analyses, many world rankings show sometimes contradictory results.
For Coincub, a Dublin-based firm of experts which establishes a world ranking of the most favorable countries for cryptos (taking into account nine criteria), it is Germany which can claim, since April 2022, the first place . After passing several very crypto-friendly pieces of legislation, in particular the ability for institutional savings funds to invest a portion of their holdings in cryptocurrencies, Germany “signals strong institutional acceptance and a bright future for crypto .” in this country” , judge Coincub. Behind Germany, the main “crypto countries” in the first quarter of 2022 would be Singapore, the United States, Australia and Switzerland.
The geographical distribution of Bitcoin ATMs, easy-to-use machines for buying/selling cryptos, often considered synonymous with the popularity of cryptocurrencies in a country, sheds another light. According to Coin ATM Radar , a reference site where operators can register their distributors, the United States is very much in the lead with nearly 33,000 machines installed, followed by Canada, Spain, El Salvador and Poland.
In terms of use, the rankings are also disparate. Chainalysis, a blockchain analysis firm, publishes a “Global Crypto Adoption Index” taking into account three sophisticated metrics to assess the most active countries in cryptocurrencies. For 2021 , the index shows Vietnam in first place, far ahead of the following India, Pakistan, Ukraine and Kenya. And according to a study by the Gemini exchange office in April 2022, India, the United States and Brazil are the countries with the most cryptocurrency owners.
In Europe, the puzzle of crypto regulation
As we can see, the designation of “Bitcoin city or country” is highly disputed and there is no shortage of candidates. But the subject of Bitcoin (and crypto-currencies in general) remains controversial, and even very divisive. In Europe, the legal or tax situation is particularly varied, not to say cacophonous, both in the European Union and more generally on the European continent.
Although the country is obviously in a very special situation, Ukraine's position vis-à-vis cryptos is emblematic. From the start of the Russian invasion, the Ukrainian government used cryptocurrencies to finance its resistance, with good success . A few weeks later, in the middle of the war, the country adopted a law in mid-March legalizing Bitcoin and crypto-currencies . But barely a month later, the Ukrainian Central Bank outright banned the purchase of bitcoins in local currency, and drastically limited their exchange from foreign currencies.
An almost schizophrenic attitude, which is found in several places in the world, both in opposing postures between governments and central banks (in India, for example) and, sometimes, in divergent discourse between members of the same government or political party ( United States, in particular).
This divergence takes on its full extent in Europe. In France, where the Central Bank rejects the very term crypto-currency, BTC and other ETH are considered financial assets in the same way as shares on the stock market, therefore subject to capital gains tax . But across the Rhine in Germany, Bitcoin and cryptos are considered a private form of money and, for example, the exchange of cryptocurrencies held for more than a year is not subject to any tax. .
Things could get even more complicated with new regulations currently being studied by European institutions, grouped under the banner MICA ( Markets in crypto assets ), a project started in 2020 and aimed at regulating crypto-assets in the broad sense, therefore crypto- currencies.
This regulation is necessary and “of paramount importance for the crypto ecosystem, not only in Europe but worldwide” , as explained by two experts in an academic article published in the journal Computer Law & Security in November 2021. Highlighting the slowness of the European process and the ambiguity of the definitions of "crypto-assets" adopted, they warn of the risk "of too much focus on detailed prescriptive rules rather than on principles and broader political objectives , which could harm the still nascent blockchain ecosystem in Europe.”
The European regulator should "encourage new players, and not overburden them with compliance costs" , "encourage new technological solutions, and not penalize innovators with a complicated and costly regulatory framework" , in other words "act as a catalyst not an inhibitor ,” they conclude.
After having tried, without success , to ban the principle of mining ( Proof of work , the basis of the operation of Bitcoin and thousands of other cryptos), the European Parliament is considering, as part of the fight against money laundering money, to limit the use of crypto-currencies. This is in particular the subject of an amendment adopted on March 31 which, if it were definitively included in the law, would mark a major evolution by forcing users of non-hosted wallets (so-called "non-custodial", i.e. meaning entirely managed and controlled by the user) to be identified by name, regardless of the value of the transfers concerned.
For Bitcoin defenders and supporters of crypto-currencies, the amendment is clearly "dramatic" and, unsurprisingly, the crypto industry is "upwind" against this European legislation and its latest developments.
Ledger, one of the only two French crypto-unicorns and world leader in the hardware wallet market (non-custodial physical wallet for storing crypto-currencies) reacts to it in a murderous column , which sums up the general feeling. "Major risk", "Threat to financial freedom", "Violation of the privacy of European citizens", "Counter-productive to fight effectively against organized crime", "Permanent weakening of European competitiveness, particularly in the perspective of Web3” are some of the grievances against the European bill, to which the company also offers an alternative. The tribune also recalls that“according to Chainalysis, the amounts laundered via cryptocurrencies represent only 0.009% of the world's GDP, while the UN estimates that 2% to 5% of the world's GDP is laundered via the traditional financial system in classic currencies” .
Switzerland, future homeland of bitcoin in Europe?
If it were definitively adopted in its current form, the European legislation could therefore transform the crypto landscape and undoubtedly benefit the most liberal countries in this area.
Already, “ Switzerland is positioning itself as a welcoming land ” for the European and French crypto industry in particular, according to the Swiss magazine Bilan, which sees a real “exodus” appearing, which even seems to be accelerating. "Associations and economic promotions are active to seduce and attract French crypto entrepreneurs in disarray" , notes the magazine, which cites the example of Sébastien Gouspillou, specialist in Bitcoin mining and emblematic figure of the French cryptosphere, whose next start -up will be based in Neuchâtel, Switzerland. "In France, practically everyone is currently considering the possibility of leaving ," said the entrepreneur.
Switzerland, where cryptocurrencies are regulated and adopted at national, cantonal or municipal level, often with a certain benevolence, is considered progressive in this area. Recent news confirms this: in March 2022, the city of Lugano (60,000 inhabitants) presented its ambitious “ Plan B ” (implied “Bitcoin Plan”).
The Lugano program includes several facets, including a crypto investment fund, scholarships for students, R&D to promote environmentally friendly Bitcoin mining and platforms to facilitate the acceptance of crypto payments. -currencies, whether Bitcoin, Tether (stablecoin with which a partnership has been concluded) or LVGA (the official token of the city). "From small transactions at local merchants to paying annual taxes and municipal utilities, blockchain will underpin all financial exchanges in the city ," the city's official website describes. An approach that amounts for the municipality to make Bitcoin, " de facto, a legal tender " .
The future will tell whether the regulation studied by Brussels will lead to Switzerland becoming a true European and/or global "crypto hub" and whether, with or without the consent of the international regulatory bodies, other countries, cities or territories decide to generalize the use of crypto-currencies. Still, in Europe, there may not be “bitcoin country” whoever wants.