With blockchain proliferating across the globe, many countries are now claiming to be “blockchain hubs”. Usually, what is meant by this is the country intends to put an infrastructure in place which could potentially attract blockchain companies at a later date. But there are definitely certain regions that are far ahead of the curve in terms of distributed ledger technology (DLT) and its wider integration into society.
#1 – Estonia
While all of the three Baltic States, including Lithuania and Latvia, can be categorized as blockchain hubs, Estonia stands out. Estonia was testing blockchain technology before the bitcoin whitepaper was published, and it has been used in the region since 2012. In other words, before most people had even heard of it, the technology was widely used in Estonia.
Additionally, Estonia is an incorporation hub offering citizenship for anybody with its e-Residency program. A large number of ICO’s and blockchain related companies choose Estonia to launch their projects due to the regulatory environment and technologically advanced infrastructure.
#2 – Japan
Japan, with over a hundred million people, is far larger than Estonia. But it is still recognized as one of the worlds leading blockchain hubs, for multiple reasons. The culture of Japan is particularly amenable to cryptocurrency, with high numbers of users playing video games using virtual currencies. 88% of Japanese citizens have heard of bitcoin, a large figure compared to other regions.
It is an innovation hub that is home to a large number of exchanges with a robust regulatory framework. Cryptocurrency trade volume is among the highest in the world. In terms of cryptocurrency exchange regulation as well as general adoption, Japan is number one. The famous Mount Gox exchange was located in Tokyo, and Satoshi Nakamoto is a Japanese pseudonym.
#3 – Malta
Malta is fast becoming the blockchain capital of the world. It recently passed three comprehensive bills on all aspects of DLT, making it the worlds most advanced blockchain jurisdiction from a legal perspective. The world’s first ICCO is launching in Malta.
Aside from Estonia, no other country offers blockchain startups such a hospitable regulatory environment covering all aspects of DLT. Many blockchain companies have chosen to move to Malta (such as leading cryptocurrency exchange Binance) and the government has specifically set out to become a leading blockchain hub, with tremendous success thus far.
Definitely not blockchain hubs
China, USA, Russia, UK, India, Finland, and Australia do not have any significant infrastructure, adoption or laws that can classify them as blockchain hubs. Despite any claims, they have actually been staunchly anti-blockchain for quite some time, though this appears to be changing.
China no longer has the trading exchange dominance it enjoyed in the early days of cryptocurrency. The yen (Japan) is now the most popular currency traded against bitcoin, with the US dollar widely traded for ether.
Potential blockchain hubs which do not quite make the elite 3 include Switzerland, Singapore, Liechtenstein, and South Korea. Cryptocurrency is popular in South Korea with many exchanges located here and a high trade volume. However, a crackdown recently took place which stunted the growth of the South Korean cryptocurrency industry. At one point, the South Korean won was the most widely traded currency against ether before the crackdown took place.
What makes for a good DLT jurisdiction?
Most blockchain hubs are nations that are typically small in size and population but not especially poor. Larger countries are more ‘unwieldly’ when it comes to getting things done, with increased red tape, bureaucracy, and approval required. The main criteria are that the county is small in size and population, yet developed. Japan is an outlier in the context of the population. Often, the largest and most advanced nations are the slowest to get going.
By contrast, a country such as Estonia or Malta can get things done quicker, there being less vested interests and red tape. Smaller countries are also easier for testing models. Many blockchain hubs also seem to be regions which are typically incorporation hubs for entrepreneurs, with favorable tax rates and legal frameworks. Countries which are overly politicized and overly bureaucratized are not hospitable to blockchain innovation.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.