bitcoin has been controversial since its inception in 2009, as have subsequent cryptocurrencies that followed in its wake.
While widely criticized for its volatility, use in nefarious transactions, and exorbitant use of electricity to mine it, cryptocurrencies, particularly in the developing world, are seen by some as a safe haven during economic storms.
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El Salvador became the first country to make it legal tender in September 2021, now followed by the Central African Republic in April of this year.
But as more people turn to cryptocurrencies as an investment or as a lifeline, criticism of cryptocurrencies continues to manifest itself in a series of restrictions on their use.
The legal status of bitcoin and other altcoins (alternative currencies to bitcoin) varies substantially from country to country, while in some, the relationship has not yet been properly defined or is constantly changing.
While most countries do not make the use of bitcoin illegal, its status as a means of payment or as a commodity varies depending on different regulatory implications.
Some countries have placed limitations on how bitcoin can be used, and banks prohibit their customers from transacting with cryptocurrencies. other countries have banned the use of bitcoins and cryptocurrencies altogether with heavy penalties for anyone transacting with cryptocurrencies.
These are the countries that have a particularly strained relationship with bitcoin and other altcoins.
algeria
Algeria currently bans the use of cryptocurrencies following the passage of a financial law in 2018 that made it illegal to buy, sell, use or hold virtual currencies.
Bangladesh
Bangladesh has an ambiguous relationship with cryptocurrencies. Officially, there are bans on cryptocurrency transactions punishable by up to 12 years under the country’s money laundering and terrorist financing laws. however, the country has proposed a new blockchain strategy indicating a warming towards cryptocurrencies and virtual assets and there have been no credible reports of convictions related to the use of cryptocurrencies.
bolivia
There is a total ban on the use of bitcoin in Bolivia since 2014. The Bolivian central bank issued a resolution banning this and any other currency not regulated by a country or economic zone.
Chinese
china has cracked down on cryptocurrencies with increasing intensity throughout 2021. Chinese officials have repeatedly issued warnings to their people to stay away from the digital asset market and have clamped down on the mining in the country, as well as against foreign exchange in China and abroad.
On August 27, yin youping, deputy director of the financial consumer rights protection office of the people’s bank of china (pboc), referred to cryptocurrencies as speculative assets and warned people to “protect your pockets “.
Efforts to undermine bitcoin, a decentralized currency outside the control of governments and institutions, are largely seen as an attempt by Chinese authorities to float their own electronic currency.
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the pboc seeks to be one of the first major central banks in the world to launch its own digital currency, and in doing so could more closely monitor the transactions of its people.
On September 24, the pboc went further and completely banned cryptocurrency transactions in the country.
After the fall of the terra luna stablecoin, Chinese authorities noted that even tighter restrictions on cryptocurrencies may be in the works.
colombia
In Colombia, financial institutions cannot facilitate bitcoin transactions. The financial superintendence warned financial institutions in 2014 that they cannot “protect, invest, intermediate or manage virtual money operations.”
egypt
Egypt’s dar al-ifta, the country’s top Islamic advisory body, issued a religious decree in 2018, classifying bitcoin transactions as “haram,” something prohibited by Islamic law. Although not binding, Egypt’s banking laws were tightened in September 2020 to prevent the trading or promotion of cryptocurrencies without a license from the central bank.
Indonesian
bank indonesia, the country’s central bank, issued new regulations banning the use of cryptocurrencies, including bitcoin, as a means of payment as of January 1, 2018.
win
Cryptocurrencies are illegal in Ghana, but its central bank has expressed interest in blockchain technology and its potential uses and is looking at how it could be integrated into the country’s financial system.
iran
Bitcoin has a complex relationship with the Iranian regime. To evade the worst impact of crippling economic sanctions, Iran turned to the lucrative practice of bitcoin mining to finance imports.
Although the central bank prohibits the trading of cryptocurrencies mined abroad, it has encouraged bitcoin mining in the country with incentives.
About 4.5% of the world’s bitcoin mining takes place in Iran, which, according to blockchain analytics firm elliptic, could generate revenue of more than $1 billion ($843 million). euros).
For the cryptocurrency industry to prosper, Iran has offered cheap energy to licensed miners, but requires that all mined cryptocurrencies be sold to the central bank.
However, mining without a license consumes more than 2 GW from the national grid every day, causing power outages.
To this end, the Iranian authorities banned bitcoin mining for four months until September 22.
indian
India is becoming increasingly hostile towards cryptocurrencies. On November 23, the government announced its intention to introduce a new bill to the Indian parliament that would establish a new central bank-backed digital currency and also ban nearly all cryptocurrencies.
In early 2021, it had considered criminalizing the possession, issuance, mining, trading, and transfer of crypto assets. Prime Minister Narendra Modi said that he wanted to make sure that cryptocurrencies “do not end up in the wrong hands, which can spoil our youth.”
iraq
Despite continued efforts by the authorities to block their use, cryptocurrencies are becoming increasingly popular in Iraq. the Iraqi central bank has been particularly hostile, issuing a statement in 2017 banning its use, which remains in effect to this day. in early 2021, the interior ministry of the kurdistan regional government issued similar guidance to prevent money brokerages and brokerage firms from handling cryptocurrencies.
kosovo
While holding or trading crypto assets is not yet banned in Kosovo, the government announced a ban on crypto mining in early January, blaming a growing energy crisis. The country, which unilaterally declared independence in 2008, is facing a historic power shortage with scheduled power outages now being implemented to conserve energy. In a new bid to curb energy waste, Economy Minister Atrane Rizvanolli announced a long-term ban on crypto mining in the country. the police have been tasked with enforcing the ban, as well as flagging mining sites across the country.
mexico
Cryptocurrencies are banned in Mexico, declaring in June 2021 that virtual assets were not legal tender and were not considered currency under existing laws. Despite the restrictions, there are some in Mexico that have embraced virtual currencies, with the country’s largest crypto exchange Bits boasting 1 million registered users.
nepal
nepal’s rastra bank declared bitcoin illegal as of august 2017.
north macedonia
North Macedonia is the only European country so far that has an official ban on cryptocurrencies, such as bitcoin, ethereum and others.
russia
Russia has a checkered association with cryptocurrencies, further complicated by its current invasion of Ukraine.
Although cryptocurrencies are not banned in Russia, until recently there was a conflict against their use. now, some see him as a savior to help the country evade heavy financial sanctions imposed by the West.
Russia passed its first laws to regulate cryptocurrencies in July 2020, which for the first time designated cryptocurrencies as taxable property.
The law, which came into force in January this year, also prohibits Russian officials from owning crypto assets.
Russian President Vladimir Putin has repeatedly linked cryptocurrencies to criminal activity, calling for more attention to be paid to cross-border crypto transactions in particular.
In July, the attorney general announced proposed new legislation that would allow police to seize cryptocurrency deemed illegally obtained by citing its use in bribery.
However, as the third largest mining center in the world according to data from the University of Cambridge, there are fears that Russia may now embrace cryptocurrencies and harness its natural resources to exploit bitcoin mining rather than undermine it.
turkey
many in turkey turned to crypto when the value of the turkish lira crashed. With some of the highest usage levels in the world, regulations came swiftly this year as inflation peaked in April.
on april 16, 2021, the central bank of the republic of turkey issued a regulation that prohibits the use of cryptocurrencies, including bitcoin, directly or indirectly, to pay for goods and services. the next day, turkish president recep tayyip erdoğan went further and issued a decree that crypto exchanges to a list of companies subject to anti-money laundering and anti-terrorist financing regulations.
vietnam
the state bank of vietnam has declared that the issuance, supply and use of bitcoin and other cryptocurrencies are illegal as a means of payment and are subject to fines ranging from 150 million vnd (€5,600) to 200 million VND (€7,445).
however, the government does not prohibit the trading of bitcoins or holding them as assets.
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