While the world is accepting digital currencies and seeking to evolve in line, some countries are clamping down on activities that involve the use of these digital currencies, popularly referred to as cryptocurrencies. Some of them have valid reasons, so let’s look at these countries.
China began imposing crypto transaction restrictions in 2013, prohibiting banks from participating in bitcoin transactions, and four years later, payment gateways allowing crypto transactions were prohibited. China dominated Bitcoin mining until September 2021, when Chinese regulators banned all cryptocurrency transactions and mining. This ban has benefited the United States the most, increasing its share of the global bitcoin hash rate from 4.1 percent in 2019 to 35.4 percent in 2021. China is the historical home of the Great Wall of China, so they are experts at erecting walls, no pun intended.
On May 6, 2014, Bolivia’s central bank, El Banco Central de Bolivia, issued a statement officially prohibiting the use of any currency or coins not issued or regulated by the Bolivian government. They stated that the ban was enacted to protect the country’s national currency, the boliviano, and to protect users from uncontrolled currency, which could result in them losing their money. Because it is one of the poorest countries in Latin America, the ban alarmed neighboring countries. In any case, the ban has not been lifted and will remain so until further notice.
In 2018, India prohibited banks and other financial institutions from doing business with cryptocurrency exchanges, resulting in the closure of a number of trading platforms in the country. To think that Coinbase, a leading global cryptocurrency exchange, announced earlier this year its intention to establish a “high-quality tech hub” in the country. In India, a defaulter could face an 18-month prison sentence simply for possessing cryptocurrency.
On December 24, 2017, the Bangladesh Bank issued a circular via their website asking everyone to refrain from trading in virtual currencies. It reiterated in 2021 that it does not permit the holding or trading of any type of virtual coin or cryptocurrency in the country, which caused confusion, if not outright shock, because the bank sent a letter to the police criminal investigation department stating that trading cryptocurrencies is not a crime, despite the fact that virtual coins are illegal. Could this be an implicit prohibition, an unresolved policy, or a legal loophole?
For years, Russia has argued that cryptocurrencies could be used for money laundering or terrorism financing. According to the Central Bank’s first deputy governor, the growing popularity of cryptocurrencies raises concerns about financial stability risks. It is illegal in Russia to conduct cryptocurrency transactions, but investing in and purchasing cryptos through exchanges is permitted. The central bank is still in serious talks with market participants about a total ban.
The State Bank of Vietnam has explicitly declared bitcoin and other cryptocurrencies to be illegal and untradeable. For defaulters, the Vietnam government has set a fine of between VND 150 million and VND 200 million, which equates to between 6000 and 9000 dollars. The bank’s ruling excludes bitcoin mining and blockchain technologies, so traders in the area can still operate but can’t use their profits to buy or sell products, so they’ll be holding for the rest of their lives.
Bitcoin miners have been attracted to Nordic countries like Norway, Sweden, and Iceland because of the plentiful renewable energy at their disposal. However, the power deficit in Iceland has led the main power utility service to cut off power supplies to some power-intensive sectors of the country, including bitcoin miners, and the miners’ requests to connect new mining facilities to the grid have been rejected. The Icelandic government outlawed the exchange of Bitcoin as part of the country’s recovery efforts.
Thailand has become the latest country in Asia after China to restrict trading in highly speculative cryptocurrency and non-fungible tokens (NFTs). The new regulations place a ban on certain types of digital coins, like Dogecoin. According to the Thai Securities Exchange Commission (SEC), the ban is aimed at protecting traders from tokens that have no clear objective and whose prices are influenced by social media trends and online influencers.
The mining and trading of cryptocurrencies is illegal in Nepal. The Nepal Rastra Bank (NRB) declared bitcoin illegal as of August 2017. According to the bank, cryptocurrency trading and mining are illegal, and encouraging such illegal activities is punishable by law. The government in Kathmandu has been proactive in cracking down on and arresting people involved in mining, trading, and related activities.
Other countries on this radar are Morocco, Ecuador, Macedonia, and Sweden.
Most of these countries are concerned about security, as well as economics, but if they can successfully integrate digital currencies into their economies, they will reap financial benefits, however volatile. Just visit the bitcoin billionaire website if you still want to trade cryptocurrency.