Cryptocurrency data analytics company and digital platform, Coincub, released its Q3 report which ranks the top ‘traditional-tax’ crypto economies across the world. In Q2 the US shared the top position with Germany, but in the most recently published Q3 report the US has fallen several spots to number six on the list, just above Hong Kong.
The current position held by the US is shared with Malaysia which moved up dozens of spots from number 43 when it first appeared on the Coincub rankings in Q2. In the report, reasons mostly related to lack of regulatory clarity are mentioned for the US falling in position. Details in the report also mention that the US could potentially post much stronger Q4 ratings since rules and regulations governing cryptocurrency investing and other uses are also expected to become clearer in the near future.
Factors Affecting The Rankings
One of the main reasons stated for the US falling in rankings is related to the lack of incentivization for crypto investing or savings, yet to be implemented in the US. This is because the US has not taken a specific stance on cryptocurrencies to a large degree, but had more of a wait-and-develop-later attitude towards the growing market sector. On the contrary, the number one and two nations – Germany and Switzerland respectively, were ranked high in the savings and long-term crypto investing category of the ranking system. Germany and Switzerland were both praised in the Q3 report for demonstrated diligence towards adopting regulatory clarity early on in the industry’s initial phase of development.
The US still rates relatively high in the regulation caveat since it was officially the first nation to integrate cryptocurrencies into strategic workplace pensions. This year has been filled with talk and actions around regulations, as the SEC has fined individuals, companies, and is currently engaged in the culmination of an ongoing court battle in the Southern District of New York behind its claims that Ripple Labs operated as unregistered security when it first made its digital token, XRP, available to the public.
Regulatory Clarity Could Mean Opportunity For Incentives
As the US sorts through regulatory uncertainties its rankings could potentially rebound to a higher spot on the list again. This is mainly because of what regulatory clarity could do to allow tax and other incentives, as well as further potentially crypto-friendly legislation to be established for investors and those who hold and use cryptocurrencies. For now, the US was rated at a -12 in the tax caveat of the most recent report. Germany and Switzerland both received a rating of four in the same section.
The UAE is reported as having “enormous tax advantages” according to details of the report. It is given as one of the main reasons the nation moved from number 18, jumping ahead of the US and several others, to become the third-ranked crypto economy in the world by the Coincub analytics and ranking system. The UAE received one of the highest rankings attributed to crypto economies on the list in the tax caveat, with a 10. The Bahamas, Belarus and Bermuda, all closing in at numbers 10, 12 and 13 on the list respectively, each received 15’s in the tax ranking.
The US still sits at the number 6 spot with Malaysia, as the nation works out issues which have been centered around legal clarity. Most recent XRP SEC news suggests a decision in the case of the SEC vs Ripple Labs could be settled as early as some time in Q4. Another potential factor – the greater cryptocurrency market has struggled through much of this year, with a long-standing bear market, which has had some wondering if ‘crypto winter’ is in fact here now, or still to come. Lawmakers and financial institutions both seem to be growing nearer to adopting and establishing clear boundaries which could encourage healthy, cooperative relationships with the collective crypto industry. This could bode well for the US and its position as a top-ranked crypto economy in the world for rating periods to come.