It’s becoming extremely evident that blockchain technology is about much more than just cryptocurrencies. Across the world, the technology is being embraced by countries and companies that see its potential beyond just disrupting the existing financial system. With the myriad of advantages that the technology is said to offer, it doesn’t seem far-fetched that this disruptive technology could change operations in certain sectors. It also seems as though no individual sector is immune to the disruptive capabilities of blockchain. Some of the sectors that have enjoyed positive blockchain disruption include the banking and finance industry, the real estate industry, cyber-security, retail, health care, and even voting, among others (though some believe that involving blockchain in voting could be dangerous).

Clearly, the days of blockchain technology’s only practical application being for digital currencies are long gone. Furthermore, blockchain sceptics can agree that blockchain’s adoption into large industries and businesses is a sure sign that distributed ledger systems are dominating the innovation space. Currently, some reputable companies and governments have already successfully implemented blockchain into their products, work processes, and services. A perfect example of this is the Estonian government. Their involvement in blockchain has led to several other regions in the world to direct their efforts to becoming global blockchain hubs which have great benefits for blockchain start-ups.

Top Global Blockchain Hubs

  • Estonia

Estonia has made major strides to incentivize the adoption and use of blockchain technology with its economy and residents. Popular for establishing e-residency, Estonia has become a go-to location for a large number of blockchain and ICO related companies. The state has an attractive regulatory environment along with advanced technological infrastructures. A notable global blockchain company that started its operations in Estonia is Guardtime. The Estonian e-Health Foundation is a great example of the extent to which Estonia has taken the concept.

  • Singapore

Singapore has received attention as a FinTech revolutionary state for quite a number of years now. It’s no surprise that the country appears in the list of blockchain hubs. The Monetary Authority of Singapore has been vocal and supportive of blockchain technology by encouraging the growth of blockchain start-ups. Currently, a lot of blockchain concepts are being produced in Singapore. A great example is TenX, a prototype Bitcoin debit card that converts crypto into fiat currency during purchases.

  • Switzerland

Switzerland also makes it to the list of blockchain and cryptocurrency friendly nations in the world. The country is headquarter to several major blockchain firms such as Tezos, ShapeShift, and Ethereum. Switzerland is open minded about blockchain and even supports it. It has a regulatory framework for ICOs and even looser regulations for blockchain start-ups. Due to having major crypto and blockchain organizations in the country, Switzerland has earned the nickname “Crypto Valley.”

  • Malta

Also referred to as “Blockchain Island”, Malta is fast growing into a global blockchain hub. Recently, Malta’s Parliament passed three blockchain and cryptocurrency bills into law, thereby, establishing a regulatory framework for blockchain. It has made Malta one of the most desirable regions for setting up a blockchain organization. Moreover, Malta offers blockchain start-ups a favourable regulatory environment along with minimal net corporate rates. Blockchain organizations such as Binance have been lured to set up headquarters in Malta.

  • Japan

Japan has embraced blockchain technology from the beginning. Many people may associate it with the Mt. Gox saga where a lot of Bitcoins were stolen (certainly not the only time or place where large amounts of crypto have been stolen). However, since then, Japan has learned from its mistakes and has established a robust regulatory framework that regulates crypto-trading and exchanges. Nowadays, Japan is recognized as a leading blockchain hub with about 50% of global Bitcoin trading represented in Japanese Yen. Japan also has the highest cryptocurrency trading volume in the world. Japan has categorized cryptocurrencies as commodities and as such they undergo no VAT.  

  • Gibraltar

Gibraltar has recently launched itself into the blockchain global arena. It set up its regulatory framework for blockchain technology back in May. At the same time, it created a safe environment for both developers and investors. A lot of investor have already taken the opportunity to set up shop in Gibraltar knowing that the state authorities support blockchain-based ventures. All companies working in the blockchain field in Gibraltar are required to acquire a license according to Gibraltar’s Financial Service Commission.

Ways in which Blockchain Hubs Attract Blockchain Start-ups

  • A Favourable Regulatory Framework

Common in most blockchain hubs is the establishment of positive and clear regulatory frameworks governing blockchain and cryptocurrencies. Such policies encourage growth activity of blockchain start-ups. At the same time, they also ensure reduction of risk.

  • Blockchain Sandboxes

Various countries and regions have taken the sandbox approach towards blockchain start-ups. Since the blockchain industry is fairly new, it might be unclear for firms as to whether a product or service complies with legal requirements. Uncertainty may cause the firm to not pursue their product or service further. Blockchain sandboxes offer blockchain start-ups a safe environment where they can test and experiment with their product while being provided with all the necessary safeguards to protect customers from failures.

  • Minimal or Non-Existent Taxes

High taxes usually stifle the growth of new start-ups. A number of blockchain hubs are restructuring their taxes in order to offer a favourable environment to blockchain start-ups. Reducing taxes or completely eradicating them fuels growth through innovation, easing requirements for new start-ups, and offers greater support for job creation in their countries. Furthermore, tax breaks help ensure that foreign capital flows into the country and puts the state on the map of blockchain hubs.        

Conclusion

Despite cryptocurrencies being questioned by some state regulators, the underlying technology, blockchain, is still expected to revolutionize the digital sector. Blockchain technology continues to emerge as a disruptive technology that start-ups are focussing on. As it continues to grow and expand, some regions and states are busy establishing themselves as global leaders in the race towards blockchain and cryptocurrency economies.

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