In recent years, the world of cryptocurrencies has experienced tremendous growth in popularity and awareness. More…
There are many countries where cryptocurrency is illegal. Crypto exchange and any transactions related to cryptocurrency are outright classified as illegal. We will touch on countries that absolutely banned crypto assets. These are also the same countries that haven’t changed their stance on the legal status of digital currencies.
What Are the Countries that Banned Cryptocurrency?
In a November 2021 report that the Law Library of Congress released, it identified the nine countries that have completely banned cryptocurrency. Part of this list is Nepal, Qatar, Tunisia, Egypt, Iraq, Morocco, Algeria, Bangladesh, and China.
We all know that cryptocurrencies challenge centralized financial institutions. While many individuals will happily start using cryptocurrency, cryptocurrency intensely alarms governments because it can potentially disrupt their economic policies and undermine their native currencies.
In this blog post, we will be listing down the top five countries where cryptocurrency is illegal. No buying, selling, or usage of any kind.
Countries that Banned Cryptocurrency – Implicit Bans
CoinGeek’s article revealed that the same report from the Library of Congress listed 42 countries that implemented implicit bans on cryptocurrency.
Here is a visual representation of the countries with implicit bans:
Top 5 Countries Where Cryptocurrency Is Illegal
China was once a potential leader in furthering the future of cryptocurrency. In fact, the first cryptocurrency exchange opened here in 2011. Additionally, Chinese merchants already accepted cryptocurrency as a form of payment in the early part of 2013. However, their concerns outweighed the benefits that they could gain from cryptocurrency and Blockchain technology.
With its wildly fluctuating prices and volatility, China changed its perspective on Bitcoin and deemed it as untrustworthy digital money. China believes its value rests on speculation and not on consistent market performance. In September 2021, China officially made cryptocurrencies illegal.
China has its “common prosperity campaign’ which looks forward to enhancing its economy by regulating capital flight. Previously, cryptocurrencies helped rich Chinese to circumvent government policies on buying foreign assets. China sees these activities as harmful to their economy hence they believe it is best to shutdown any kind of cryptocurrency operations to curtail foreign investments and expenses made by their citizens.
Qatar Financial Centre Regulatory Authority (QFCRA) banned all digital assets and services linked to cryptocurrency except for security tokens last December 2020. Despite its development of financial technologies including blockchain tech to transfigure their country’s financial services, cryptocurrencies are not welcome due to the imminent threat to their banking systems.
The Qatar Central Bank stated in 2018 that it “is highly volatile and can be used for financial crimes and electronic hacking as well as risk loss of value because there are no guarantors or assets”. That’s why Bitcoin trading classifies as illegal.
In a statement, Qatar Central Bank’s governor, Sheikh Abdulla bin Saoud Al-Thani, emphasized their strict resistance to any system that will financially disrupt their country and give way to money laundering and terrorist financing.
Bangladesh is part of the 6 countries that remain hostile to cryptocurrencies up to date. The Bangladesh Bank cites their Foreign Exchange Regulation Act, 1947, and the Money Laundering Prevention Act, 2012 as the basis for declaring the usage and trading of cryptocurrencies as illegal.
These two laws prevent any individual or financial agency in Bangladesh from partaking in any transactions involving cryptocurrencies since it is considered a crime.
In 2018, Algeria passed the 2018 Financial Law of Algeria, stating that:
“The purchase, sale, use, and possession of so-called virtual currency are prohibited. A virtual currency is one used by Internet users over the Internet. It is characterized by the absence of physical support such as coins, paper money, or check or credit card payments. Any violation of this provision is punishable in accordance with the laws and regulations in force.”
Bitcoin and other cryptocurrencies are native to the Internet. Therefore, they don’t have a physical form. Users cannot withdraw it via ATMs, and issuance of check payments is also not possible.
Also, authorities still associate cryptocurrency with illegal activities such as terrorism financing, which Algeria actively combats against. The Algerian government considers these factors as significant drawbacks.
Bolivia: First Country That Banned Cryptocurrency
Since 2014, Bolivia has already completely banned the use of cryptocurrency. The ban also encompasses any decentralized currency referring to any and all existing cryptocurrencies. Bolivia is not open to commercialized or privatized cryptocurrency transactions. The Banco Central de Bolivia or their Financial System Supervision Authority will not authorize or regulate those deals.
Protecting its citizens from substantial potential losses and being victims of scams is Bolivia’s priority. Hence, they took significant precautions to stop the circulation of cryptocurrencies in their economy.
Final Word on List of Countries Where Cryptocurrency Is Illegal
These countries believe they are looking out for their citizens’ welfare by prohibiting the entry of cryptocurrencies into their financial systems. Their fears are rational and sensible because cryptocurrency still has to prove itself. But it cannot be denied that the technology on which cryptocurrency operates is quite promising.
There are countries that have implemented legal safeguards, such as making crypto subject to anti-money laundering policies to help protect their citizens who are using crypto. They know that in the long run, crypto will prove itself useful and efficient- lower remittance fees and faster transaction time.
It is possible that the five aforementioned countries will still reconsider their decisions. The world is moving towards modernity at a rapid pace and it is best if we all move to match its momentum.