Cryptocurrency regulation has been controversial since its beginning in 2009. The legal status of cryptocurrencies varies substantially from country to country. India has proposed a bill on cryptocurrency in the upcoming Winter Session of Parliament prohibiting private cryptocurrencies with certain exceptions.
The outright prohibition of cryptocurrencies mainly happened during 2017-18, coinciding with Bitcoin’s bull run. Some countries have placed limitations on how Bitcoin can be used, with banks banning their customers from making cryptocurrency transactions or heavy penalties for anyone making crypto transactions.
Here’s a look at the countries where cryptocurrencies are restricted or illegal:
China was at one point home to the world’s largest number of Bitcoin miners. The Chinese government claimed that the ban on cryptocurrency was to reduce energy prices and greenhouse fuel emissions associated with crypto transactions. Chinese officials have repeatedly issued warnings to its people to stay clear of the digital asset market and have clamped down hard on mining in the country and currency exchanges in China and overseas.
The central bank of Bangladesh does not allow crypto-trading as it goes against the country’s financial regulations (Money Laundering Prevention Act) of trading in foreign currencies, which are too decentralised. If found trading in cryptocurrencies, crypto traders can face years of imprisonment in the nation.
Market sites for Bitcoins and other cryptocurrencies are blocked in Russia. However, it is expected that Russia might reconsider trading in cryptocurrencies in the coming future.
Under the Islamic legislature, cryptocurrency transactions are prohibited in Egypt. The Egyptian Islamic advisory, Dar al-Ifta, believes that cryptocurrencies might be harmful to the country’s national security and economic health.
The foreign exchange office of Morocco had said that transacting in virtual currencies was an “infringement” on forex regulations. The decision of banning crypto-trading in Morocco came in 2017. It is speculated that the government of Morocco may allow crypto-trading under specific conditions in the coming future.
Nigeria imposed a crypto ban in February 2021. The largest cryptocurrency market in Africa banned banks and financial institutions providing on and off-ramp crypto services since 2017. In addition, the announcement even threatened to close bank accounts found using cryptocurrency exchanges.
Bolivia’s central bank banned all decentralised cryptocurrencies in 2014. It also made provisions to allow those created by the government, however, this ruling was put in place to protect the national currency and protect investors. At the time, Bolivia was the only country in South America with an outright ban.
Ecuador implemented an outright ban on decentralised currencies, later in 2014. In a vote in the National Assembly, the government amended the monetary and financial laws to allow for payments using “electronic money,” while prohibiting coins not controlled by the state.
Qatar warned banks against trading in cryptocurrencies in 2018. The government asked the banks to not “deal with Bitcoin, exchange it with another currency, open an account to deal with it, or send or receive any money transfers to buy or sell this currency.” Those caught were told they would face penalties.
Many in Turkey turned to cryptocurrency as the Turkish lira plummeted in value. With some of the highest levels of use anywhere globally, the arrival of regulations was swift this year as inflation peaked in April. On 16 April 2021, the Central Bank of the Republic of Turkey issued a regulation banning the use of cryptocurrencies, including Bitcoin. The following day, Turkish President Recep Tayyip Erdoğan went further and issued a decree that crypto exchanges to a list of firms subject to anti-money laundering and terrorism financing rules.