As digital asset prices had been hitting new historical highs in 2021, many jurisdictions were increasingly adopting cryptocurrencies like Bitcoin (BTC) and other crypto-based instruments.
In addition to Bitcoin crossing $68,000 for the first time since inception, the year of 2021 will be remembered for Bitcoin’s historical adoption as legal tender in El Salvador. The world’s first-ever Bitcoin exchange-traded fund (ETF) was also inaugurated in 2021, alongside many other benign regulatory developments around the world.
As we glance back at notable global regulatory moments in 2021, Cointelegraph has picked some of the most memorable instances of friendly crypto regulation.
1. El Salvador: The first country in the world to adopt Bitcoin as legal tender
The Republic of El Salvador, the smallest nation in Central America, officially adopted Bitcoin as legal tender on Sept. 7, 2021, becoming the world’s first country to do so. Bitcoin was trading at around $47,000 on the day of Bitcoin’s official adoption in the country.
El Salvador’s bold Bitcoin move took several months to materialize as president Nayib Bukele had first introduced the “Bitcoin Law,” laying the groundwork for BTC’s usage as an official payment method alongside the United States dollar in June 2021. The Salvadoran Legislative Assembly subsequently passed the law, which amassed a supermajority of 62 out of 84 votes.
Known as the “Land of Volcanoes,” El Salvador also moved to deploy its volcanic activity to generate new Bitcoin. In September, president Bukele teased a Bitcoin mining plant powered by volcanic geothermal energy in El Salvador, marking a major case for cutting BTC’s carbon footprint. Soon after, Bukele upped the stakes even further when he announced plans to establish an entire Bitcoin city, funded by BTC bonds.
While the crypto community celebrated El Salvador’s BTC drive, global financial authorities like the International Monetary Fund have expressed skepticism about the government’s move into crypto.
Related: El Salvador buys 21 Bitcoin to celebrate Dec. 21, 2021
Some people in El Salvador were also unhappy with the Bitcoin Law, with some protesting against Bitcoin adoption due to concerns over its unstable price. Some of the protests even resulted in destroyed Bitcoin ATMs.
2. The United Arab Emirates: CZ’s new home
The UAE emerged as one the most crypto-friendly countries in 2021 as authorities in its capital city of Dubai have been ramping up the efforts to enable the crypto industry’s development.
In January, the Dubai Financial Services Authority (DFSA) announced plans to establish a comprehensive crypto regulatory framework as part of its 2021 business plan. The DFSA subsequently issued several regulatory approvals, including one for a major Canadian investment product, The Bitcoin Fund, in October. DFSA has also been working on regulations for investment vehicles like security and derivative tokens.
UAE regulators also came up with multiple arrangements to officially allow and support crypto trading in several free economic zones in Dubai. The nation has also been making strides in nonfungible tokens (NFT) adoption as its postal operator issued NFTs in November to commemorate the federation’s 50th National Day.
In late 2021, the Dubai World Trade Centre Authority said it will become a comprehensive zone and regulator of cryptocurrencies, products, operators and exchanges.
Related: Binance joins fresh crypto hub by Dubai World Trade Centre
The UAE is becoming an attractive destination for some of the world’s largest cryptocurrency companies and industry figures. In October, Binance CEO Changpeng Zhao reportedly bought his first home in the “very pro-crypto” Dubai. The Chinese-Canadian business executive had previously claimed that he did not own any real estate as of April 2021.
