How to Choose a Crypto-Friendly Country for a Blockchain Business

In this article, we’ll provide a brief overview of how each type of crypto business is currently regulated in different countries around the world. We’ll also explore the legal matters that you should be aware of when launching your blockchain business.

Regulators qualify all the businesses we cover here as Virtual Asset Service Providers (VASPs). VASPs include crypto exchanges, wallets, DeFi (decentralized finance), NFTs (non-fungible tokens) marketplaces, play-to-earn games, and other crypto businesses. Around the globe, some regulators have developed special regulatory modes for VASP whereas others have adopted a wait-and-see approach. Some business models, like certain DeFi applications, still fall outside the scope of VASP regulations in some countries.

This guide serves as a starting point in discovering potential crypto-friendly countries for your specific project type and provides helpful links to dive deeper into specific business models and jurisdictions.

The most crypto-friendly countries for registering a crypto business in 2025

As more and more jurisdictions embrace crypto, here’s a snapshot of some of the most crypto-friendly countries in 2025, grouped by business model/project type.

1. Token issuance: Switzerland, Lichtenstein, Gibraltar, Cayman Islands, Hong Kong, Singapore, BVI, Panama, and Seychelles.
2. Stablecoin issuance: EU, Singapore, UAE, US, and El Salvador.
3. Centralized cryptocurrency exchanges: US, EU (especially Lithuania and Estonia), UK, Gibraltar, UAE and Canada.
4. DEXs and DeFi projects: UK, UAE, Cayman Islands, Estonia, Singapore, BVI, Panama, Switzerland, Liechtenstein, and Marshall Islands.
5. Non-fungible token (NFT) platforms: US, Canada, Hong Kong, UK, and Caymans Islands.
6. Non-custodial wallets: Israel, Switzerland, BVIs, and US.
7. Custodial wallets: Bermuda, Estonia, Lithuania, Malta, Cayman Islands, UAE and US.
8. Play-to-earn games: Switzerland, Singapore, Hong Kong, and Cayman Islands.
9. Decentralized AI projects: US (Delaware), Singapore, UK, UAE, BVI, Panama, Liechtenstein, Switzerland, Cayman Islands and Costa Rica.

💡Worth checking: Tax-Friendly Countries for Tech Startups

What crypto-friendly countries are best for centralized crypto exchanges?

Centralized exchanges store users' virtual assets centrally and administer the cryptocurrency trading process on their platforms.

In most countries, the operation of centralized exchanges requires obtaining special licenses or authorizations. These licenses can be divided into two categories: general fintech and special cryptocurrency licenses.

General fintech licenses include:

• the Money Transmitter License in the United States
• the EMI (Electronic Money Institution) License in England and Lithuania

It’s important to note that the US Money Transmitter License varies from state to state, forcing centralized exchanges like Gemini and Coinbase to amass licenses in around 40 US states each already. An increasing number of states are opting into the National Multistate Licensing System, which should streamline the process of compliance.

In the UK, Gemini, Coinbase and Crypto.com have had EMI licenses issued by the Financial Conduct Authority. Meanwhile these exchanges also have secured licenses for the EU, along with Kraken, that secured an EMI license from the Central Bank of Ireland, allowing it to expand its EUR fiat services to clients in all 27 European Union member states.

Special cryptocurrency licenses include:

• A DLT (Distributed Ledger Technology) license in Gibraltar
• Registration in the IDGM zone in the UAE
• Obtaining authorization from financial monitoring authorities in Canada and Estonia

📚 Learn more: How to Choose the Right VASP License for Your Crypto Business

Obtaining a general fintech and a special crypto license requires several steps, including preparing a business plan, conducting a technical audit of the system that will store users' assets, and implementing proper financial, AML (Anti-Money Laundering), and privacy compliance.

📚 Read more: How to Legally Structure Cryptocurrency Exchanges (CEX & DEX)

How to choose a crypto-friendly country for decentralized exchanges & DeFI

A decentralized exchange is based on a smart contract that does not provide for centralized storage of cryptocurrencies but instead independently changes one cryptocurrency to another under the rules laid down in the smart contract and following the trading orders that users create.

In countries like the United States, decentralized exchanges (DEXs) were recognized as financial companies and, in their legal status, were equated with centralized crypto exchanges. DeFi projects (staking, yield farming, crypto lending platforms, etc.), which regulators recognized as financial services, also fall under the same qualification.

Today, most DeFi projects try to follow a path of progressive decentralization in order for their protocols to fall outside the scope of VASP regulations. For more information, check out our guides:

1. The Legal Strategizing Playbook for Web3 Builders, which guides you through the three stages of building your very own legal strategy and the important early steps you should be taking.
2. The “Decentralization Test” for Web3 Protocols, which follows on from the legal strategizing playbook and covers a two-stage “self-assessment” process for decentralized protocols.
3. The Progressive Decentralization Playbook, which follows on from the decentralization test playbook and looks at the three stages of progressive decentralization and what a legal structure might look like at each stage.
4. The Fully Decentralized Protocols Playbook, which covers the important legal steps that projects must take to minimize governance.

If your DeFi project falls within the scope of VASP regulation and doesn't pass the decentralization tests, at some point you might need need to choose a VASP jurisdiction and license according to your business model.

For DeFi projects that follow a progressive decentralization path, this (very brief) overview of setting up the legal structure (and possible crypto-friendly countries) looks like this:

1. Register a DevCo in a tech-friendly jurisdiction for early-stage development and early equity and future tokens fundraising. Jurisdiction options include the UK, the UAE, the Cayman Islands, Estonia, and Singapore.
2. Register a TokenCo or a protoDAO to issue protocol tokens and incentivize users. If you choose to create a protoDAO to issue tokens and create a legal wrapper for DAO members, consider registering a Marshall Islands DAO LLC, Cayman Islands Foundation or ADGM DLT Foundation. Alternatively, a TokenCo might be more suitable, either in onshore jurisdictions like Switzerland, Liechtenstein, or Singapore, where a TokenCo can obtain token authorization or offshore jurisdictions like the Cayman Islands, BVI or Panama. We appreciate this is a lot of information and options, so to learn more about the protoDAO vs TokenCo route, read our Guide on Progressive Decentralization and our Guide on Utility Token Issuance.
3. Register a Foundation for long-term protocol development and treasury management. If the protoDAO should act more like a legal wrapper, then consider registering a Marshall Islands DAO LLC, a memberless Cayman Foundation, or an ADGM DLT Foundation in the UAE. Consider other additional entities for other functions if needed, such as a front-end operator company or development funds manager company.

Where to register crypto wallets

Crypto wallets are divided into custodial and non-custodial wallets, depending on the principle of operation. Custodial wallet providers store users' virtual assets in their wallets, controlling the private keys to these wallets. Non-custodial wallets allow users to independently generate a private key and fully control their virtual assets on the wallet.

Because providers fully control users' virtual assets stored on custodial wallets, in most countries they are required to obtain special authorizations from financial monitoring authorities. Key examples include the Financial Intelligence Unit in Estonia, the FinTRAC in Canada, and the Bureau of Fraud Investigation in Ireland.

Registration of a custodial wallet with a financial monitoring authority requires the wallet provider to appoint an AML officer in the company, implement KYC (Know Your Client) procedures for clients, and enable AML analysis of transactions that pass through wallets for their affiliation with sub-sanctioned blockchain wallets (darknet wallets, crypto mixers, etc.).

As for non-custodial wallets, there are currently no separate regulatory requirements. Some of the providers of these wallets have introduced the possibility of the token swap—the ability to automatically exchange one token for another. You need to be careful with this function, as regulators of certain countries can recognize it as providing services to exchange some virtual assets for others. Therefore, if you plan to launch a wallet with a token swap function, this function must be properly legally structured and described in the Terms & Conditions of the crypto wallet.

Many crypto wallets or exchanges with wallet features have already secured VASP licenses in countries around the globe. For example, Chivo Wallet and Strike have VASP licenses in El Salvador, whilst BitMart crypto exchange, which offers wallet functionalities as part of its platform, is registered in the Cayman Islands.

Non-custodial wallets can consider registering in:

• Israel (like ZenGo)
• Switzerland (like BRD)
• The British Virgin Islands (like Coinomi)
• The US (like Metamask)

Custodial wallets can consider registering in:

• Bermuda (custodial wallet services providers must adhere to some regulations)
• Estonia or Lithuania (authorization to act as the provider of a virtual currency wallet service is required)
• Malta (operation under a VFA 5 License is required)
• The Cayman Islands (a VASP license is required)
• The UAE (authorization is required)
• The US (with a money transmitter license)

📚 Read more: A Legal Guide to Custodial and Non-custodial Wallets

Which country is best for NFT marketplace registration?

Today, in most countries, NFTs are qualified as digital goods, and their "non-interchangeability" property allows them to equate their legal status with collectible goods.

The main criteria for choosing a jurisdiction to register an NFT marketplace is its business model. If the marketplace's operation involves an auction format (commission business model), you will need to obtain an auction license/authorization to operate in the country of registration.

Suppose the NFT marketplace receives IP-related income (earns royalties at the time of resale of the NFT). In that case, it's essential to choose an IP-friendly jurisdiction that has special tax regimes for IP-related income. It is worth considering Switzerland, the Netherlands, and Cyprus, among other countries.

Jurisdictions for registering an NFT marketplace include:

• Canada (NBA Top Shot)
• Hong Kong (Crypto.com NFT)
• The Cayman Islands (Axie Marketplace)
• The UK (KnownOrigin)
• The US (where OpenSea, Rarible, and Magic Eden are registered)

📚 Read more: Types of NFT Marketplaces and How to Legally Structure Them

Where to register a crypto company for a play-to-earn games business

During the emergence of NFTs and DAOs, many game developers began to think about how implementing tokenomics in-game mechanics could help increase player engagement and motivate them to spend more time in games. As a result, play-to-earn (P2E) games started to appear.

The business model of P2E games usually consists of two parts: minting of NFT and earning in-game currency, for which in-game purchases are possible. The legal aspects that arise in connection with the minting of NFT in play-to-earn games and their subsequent sale on the gaming marketplace are the same as for NFT marketplaces.

A slightly more complicated situation is with in-game currency. Suppose the game developers plan to give in-game currency liquidity outside the game (for example, make it possible to trade it on 3rd party platforms) and equate the currency’s value to the dollar (or other fiat currency). This in-game currency could be recognized in some countries as electronic money and therefore require a special license.

To choose a jurisdiction for a play-to-earn game, you should take into account two criteria:

1. Whether you need to have the ability to accept payments in cryptocurrency. Countries that have regulated this include Switzerland, Singapore, Hong Kong, and the Cayman Islands.
2. Whether you need to have the ability to issue your own token. You can learn more about how to choose a country for launching your token here.

📚 Read more: 3 Best Countries for Play-to-Earn Games Registration

Which countries are best for registering companies for decentralized AI projects?

There are also further considerations to take if you plan to launch a decentralized AI projects, a growing field where artificial intelligence meets blockchain technology and produces infrastructure and platforms/AI agents, among other projects.

There are three key milestones or stages for ‘deAI’ projects

1. The initial fundraising, or testnet stage, which is the stage before the project goes live and consists of securing funding for development and testing. This might include obtaining ecosystem grants and venture capital, followed by onboarding testnet users.
2. The token/node sale, or mainnet/launch stage, which is when the project, now ready for mainnet launch, token sale or node sale, can generate more funding and distribute tokens or access rights.
3. The platform launch, or the operating stage, is the final step of the project’s journey whereby it becomes available to a much larger audience. This stage requires careful planning of promotional activities, user onboarding, monetization, moderation and compliance and custody and licensing activities.

Each stage also requires its own legal entity to support the stage’s activities.

1. The initial fundraising/testnet stage will need a DevCo, registered in a location like Delaware, Singapore, the UK or the UAE.
2. The token/node sale stage will need a company registered, either a foundation or a token/node issuance subsidiary. A token/node issuance subsidiary is for handling the token/node sale and related legal and regulatory compliance—all centralized token launches are highly recommended to have a Token issuance entity. Offshore choices include the BVI and Panama. Onshore options include Liechtenstein and Switzerland (both of which require local authorization). A foundation is for decentralized management of on-chain aspects like the protocol, smart contracts, infrastructure, and token treasury. Offshore options include the Cayman Islands and Panama, whereas onshore options include the ADGM in the UAE and Switzerland.
3. The launch and operating stage may need various companies registered in jurisdictions to ensure compliance with different activities. For example, you may need a front-end operator subsidiary in the BVI, Panama or Costa Rica. There are lots of different legal compliance matters to consider here, and legal structuring (setting up specific entities) may hugely help to remain compliant in multiple jurisdictions.

Countries mentioned: United States (Delaware), Singapore, United Kingdom (UK), United Arab Emirates (UAE/ADGM), British Virgin Islands (BVI), Panama, Liechtenstein, Switzerland, Cayman Islands, Costa Rica.

📚 Read more: How to Legally Structure Your Decentralized AI Projects and AI Node Sale

Which crypto-friendly country is best for stablecoin issuance?

A stablecoin is a type of cryptocurrency designed to maintain a stable value, typically pegged to a reserve asset like a fiat currency or cryptocurrencies. Unlike traditional cryptocurrencies, stablecoins aim to minimize price volatility, making them suitable for everyday transactions and financial activities.

The following countries have regulations that are either specific to stablecoins or that in some way affect them, and consequently should be considered when deciding in which country you should issue your stablecoin.

• The US already hosts successful stablecoins like USDC, and there is new (proposed) legislation could open doors for more issuers.
• The EU has strict requirements for stablecoin issuance set out under the Markets in Crypto-Assets Regulation (MiCA). The clear regulatory framework means that issuers who can meet the stringent standards, particularly for fiat-backed tokens with a 1:1 liquid reserve ratio, may find success in this market.
• The UAE, specifically the Abu Dhabi Global Market (ADGM) and Dubai Financial Services Authority (DFSA) have introduced regulations permitting stablecoin issuance, with a focus on fiat-referenced tokens. The approval of dirham-pegged stablecoins and the acceptance of major stablecoins like USDT indicate a growing opportunity in this region.
• Singapore has categorized stablecoins and set specific requirements for issuers, providing a path for both local and international companies to enter the market under the "MAS-regulated stablecoins" designation.
• El Salvador issued the country’s first registered and regulated stablecoin in 2024, and is considered very stablecoin friendly.

📚 Read more: Stablecoin Issuance Regulation Guide for 2025

Get started by choosing the right country

Today, new types of crypto businesses are appearing around the world all the time. The business models for these crypto businesses may be under the regulatory oversight of—and therefore must also be aware of—financial laws, securities laws, consumer protection laws, and VASP-specific legislation already passed in some countries.

To launch a VASP without risking a law violation, it is necessary to acknowledge the legal aspects of the business model, take care of any required licenses/authorizations, and implement compliance procedures.

It is also critical that you understand which legal aspects you should consider when launching a crypto business. If you need help with registering yours, start by contacting Legal Nodes. We'll be happy to speak to you about your crypto project and learn about your business goals. We’ll then prepare a customized quote for legally setting up your business in the most suitable locations. Legal Nodes has been providing legal support for crypto companies for the last 7 years, helping establish businesses in over 10 crypto-friendly countries. Get in touch today to find out how we can help you.