Cryptocurrencies are gaining popularity around the world, but some countries have banned cryptocurrency and governments are concerned about their volatility and decentralized character. They see them as a threat to their financial systems and a potential source of assistance for illegal operations such as drug trafficking, money laundering, and terrorism. Governments around the world are cracking down on deceptive crypto advertising and enacting regulations to protect foolish investors. Governments’ relationship with cryptocurrencies has been strained, leading to outright bans on purchasing, owning, and trading. The outright restriction of cryptocurrencies occurred in 2017 and 2018, coinciding with the bull run in bitcoin.
However, some countries continue to examine prohibitions on these uncontrollable coins and banned cryptocurrency. Governments are working to crack down on deceptive advertising and protect foolish investors.
THE REASONS FOR BANNED CRYPTOCURRENCY:
Banned cryptocurrency for significant dangers associated with cryptocurrencies for countries include those related to consumer protection, financial stability, and illegal activities. . Tracking and tracing transactions can be difficult due to their volatility and speculative nature. Governments fear that widespread use of cryptocurrencies could disrupt established financial markets and undermine their stability. Consumer protection is also an issue because ordinary investors are subject to fraud and financial loss.
A problem that also arises is illegal activities such as tax evasion and money laundering. Due to the privacy and anonymity that cryptocurrencies provide, it is difficult for tax authorities to track revenue and enforce tax laws. In other countries, central banks fear that cryptocurrencies will make it more difficult for them to control monetary policy and then they banned cryptocurrency.
Another issue for banned cryptocurrency is security, as there have been hackers, security breaches, and flaws in bitcoin exchanges and wallets in the past. The discussion surrounding cryptocurrencies and their use by governments may also be influenced by competing interests, international sanctions, and cultural and ideological considerations.
BANNED CRYPTOCURRENCY COUNTRIES
Algeria has banned cryptocurrency use because it claims that they are unbacked by any tangible assets. A financial measure scheduled for 2018 will outlaw keeping, dealing, and exchanging any kind of cryptocurrency. Due to a financial law passed in 2018, it is now unlawful to purchase, sell, use, or hold cryptocurrencies in Algeria.
With government banned cryptocurrency use subject to sentences of up to 12 years under the country’s money laundering and terrorist financing legislation, Bangladesh has a contentious relationship with the technology. A new blockchain approach, however, points to a shift in attitude toward cryptocurrencies and virtual assets. Because they are used for bank fraud and money laundering, bitcoin and other cryptocurrencies are unlawful. In 2017, Bangladesh ruled that cryptocurrency-related activity was prohibited due to violations of anti-money-laundering and anti-terrorism laws.
Bolivia has a completed banned cryptocurrency usage since 2014, with the Bolivian Central Bank implementing a resolution banning decentralized cryptocurrencies. This ruling was aimed at protecting the national currency and investors, making Bolivia the only South American country to ban crypto. Bolivian lawmakers were concerned about the trade’s impact on their country. However, crypto advocates are working to overturn the ban, as the Central Bank has prohibited cryptocurrencies due to their unregulated nature.
China has increasingly tightened its grip on cryptocurrency in 2021, warning its citizens to stay away from digital asset markets and imposing strict regulations on mining and currency trading. The People’s Bank of China (PBoC) has deemed cryptocurrencies a speculative asset and warned people to protect their wallets. The PBoC is looking to launch its own digital currency, allowing for closer monitoring of transactions. In September, the People’s Bank of China banned cryptocurrency transactions in China. China is the largest country to ban all cryptocurrencies on its territory, starting with a ban on local exchanges in 2017 and moving towards a complete ban in September 2021.
The central government’s reason for banning cryptocurrencies is mainly due to concerns about an underground cryptocurrency economy that could harm China’s economic development. China’s digital Yuan has published online salaries, and the country has regulated 70% of its Bitcoin mining facilities for environmental reasons.
In 2014, Colombia’s Superintendencia Financiera issued a warning to financial institutions forbidding Bitcoin transactions, noting that they cannot administer, protect, invest, or broker virtual currency operations.
Bitcoin transactions were deemed “haram” in 2018 by Egypt’s Dar al-Ifta, breaking Islamic law. The nation’s financial regulations were tightened in September 2020 to forbid dealing or promoting cryptocurrencies without a Central Bank license. Egypt is the last nation in North Africa to outlaw cryptocurrency trading, highlighting the fact that the value of cryptocurrencies is unrelated to physical assets and that only recognized national currencies may be exchanged there. The Dar al-Ifta is concerned that cryptocurrency could harm both the economy and national security.
Cryptocurrencies are growing in popularity in Iraq, despite authorities’ efforts to prevent their use. The Central Bank of Iraq and the Kurdistan Regional Government have issued guidelines prohibiting brokers and currency exchanges from handling cryptocurrencies and financial institutions are not allowed to do so.
Türkiye’s central bank has banned cryptocurrency payments due to lack of regulation and central authority. The ban was prompted by the decline of the Turkish lira and the country’s highest level of cryptocurrency usage in the world. On April 16, 2021, the Central Bank banned the use of cryptocurrencies, including Bitcoin, for the sale of goods and services. President Recep Tayyip Erdoğan has added cryptocurrency exchanges to the list of businesses subject to anti-money laundering and counter-terrorism financing regulations. Cryptocurrencies are not allowed as financial assets in banks or as payment instruments.
The State Bank of Vietnam has declared Bitcoin and other cryptocurrencies considered illegal means of payment, with fines ranging from €5,600 to €7,445. However, Bitcoin is still banned from commercial transactions and research is being conducted to understand its implications.
Last thoughts for banned cryptocurrency:
Cryptocurrency regulations are evolving around the world as cryptocurrencies gain greater acceptance. Countries are expected to introduce legislation once the EU adopts its MiCA proposal. Investing in cryptocurrencies and initial coin offerings (ICOs) is inherently risky and speculative. Regulations vary widely, some countries enforce strict bans and others impose responsible use. Staying informed about cryptocurrency regulations in certain countries is essential. Governments are increasingly embracing digital innovation, while jurisdictions that oppose it risk being left behind. Encouraging crypto businesses with favorable regulations offers opportunities to improve innovation, capital, tax revenue and living standards.