Countries that have banned cryptocurrency tend to act on intuition. In fact, their governments cannot decide how to regulate this new economic phenomenon. Bitcoin has caused excitement for 12 years, facing a wide range of reactions — from complete rejection to approval. Some people in the developed countries criticize the currency for being highly volatile, causing environmental threats, and being linked to criminal activities. In the developing countries, on the other hand, it is often seen as a safe harbor during economic crises which have been wreaking havoc for several years.
The more people turn to cryptocurrency, the more perplexed the authorities become as to how it can be regulated. On the one hand, governments want to protect their people from fraud. On the other hand, they are concerned about certain taxes and fees not going into the budget because of virtual transactions. That is why some countries impose certain restrictions.
Each country defines its own legal status for Bitcoin and other cryptos.
Bitcoin has caused controversies since its appearance in 2009. So have other cryptocurrencies that were launched later. Many governments simply cannot make a decision and end up either ignoring the issue altogether or imposing bans, restrictions, and penalties for the use of e-currencies.
Below you will find a list of countries with a particularly strained relationship with cryptocurrencies.
China started to crack down on cryptos in 2021 when it decided to get rid of all competitors to the digital RMB. In order to support its national digital currency, China banned mining, cryptocurrency exchange, and use. The People’s Bank of China intends to become the first financial organization to launch its own national cryptocurrency.
In Algeria, the use of cryptocurrencies has been prohibited since 2018. It is illegal to buy, sell and hold cryptocurrencies, as well as make any crypto transactions.
This country banned Bitcoin even earlier — in 2014. It completely prohibits the use of Bitcoin and any other cryptocurrencies not regulated by the government.
Iran went through a lengthy recovery from economic sanctions and decided to support mining. While the trading of cryptos from overseas is prohibited, the use of cryptos mined in the country is encouraged. As a result, about 4.5% of Bitcoin mining takes place in Iran which accounts for about one billion US dollars.
Licensed miners are offered cheap energy provided that the mined tokens need to be sold to the Central Bank. Such active mining has even caused power shortages in the country. Because of that, the authorities had to issue a 4-month ban on mining which will last until September 22.
In 2014 local financial institutions were banned from protecting, investing, brokering, or managing cryptocurrency transactions.
In their fight against cryptocurrencies, Egyptian authorities use religion as leverage. In 2018, Dar al-Ifta, Egypt’s main Islamic advisory body, issued a religious decree, designating Bitcoin transactions as prohibited under Islamic law, or “haram”. In September 2020, the authorities further tightened the banking laws, in order to prevent cryptocurrency trading or promotion without a Central Bank license.
In August 2017, the Nepal Rastra Bank has classified Bitcoin as illegal.
This is the only country in Europe that has banned all cryptocurrencies.
Bank Indonesia issued regulations, according to which the use of cryptos, including Bitcoin, as a means of payment is banned from 1 January 2018.
The State Bank of Vietnam has stated that the issuance, supply, and use of Bitcoin and other crypto-assets as a means of payment is illegal. The fines range from VND 150 mln (5,600 euros) to VND 200 mln (7,445 euros).
However, holding and trading Bitcoin has not been banned.
When the value of the Turkish lira went down, many of the Turkish citizens turned their attention to cryptocurrencies. On April 16, 2021, the Central Bank of the Republic of Turkey stated that it is forbidden to use Bitcoin and other cryptos, directly or indirectly, to pay for services or goods. On the next day, Recep Tayyip Erdoğan, the country’s president, went even further and issued a decree classifying crypto exchanges as firms that are subject to anti-terrorism financing and anti-money laundering regulations.