Top-12 countries that do not see eye to eye on cryptocurrencies and blockchain technology for various reasons
The geography of blockchain and cryptocurrencies is still growing and it’s still difficult to brand one region as being more favorable towards the new tech over the others. But several individual countries have come out as being outright crypto-skeptic and for a good reason, or at least according to them. While some take initial coin offerings (ICO’s) with a pinch of salt, others ban cryptocurrency exchanges, a few go after the crypto miners, and one country just ruled to ban the whole crypto ‘thing’ entirely, at least for now. Such individual cases also contribute to the wider environment in which the cryptosphere must develop as several large markets end up being shut off. Here’s our pick of the top crypto-skeptic countries.
The legitimacy of cryptocurrency trading is questioned not only by the government but also by the country’s religious leader. In case of Egypt, it influences state regulations directly. Crypto trading is forbidden in Egypt under the Islamic law. Egypt’s highest religious leader stated that Bitcoin and other cryptocurrencies are prohibited due to the risks and issues which could be caused by crypto activities.
There was once a rumor that Egypt’s central bank may move to permit cryptocurrency handling. Although it was denied by Gamal Negm, deputy governor, who stated that the Egyptian banking system deals with official currencies for maintaining financial stability.
Morocco Trade and Development services were about to announce that bitcoin would be illegal to use as a payment method only. However, Foreign Exchange office and Central bank issued a statement that all the digital transactions with foreign countries without an authorization of central bank would be prohibited. It was declared that fines and penalties will affect both private parties and financial institutes. The decision to ban the cryptocurrency was not a disclosure, and as you would have thought all those invested in blockchain were disappointed by the decision.
The decision to ban cryptocurrency depended on the common risks and concerns about the unregulated financial institution which can be used for illegal activities.
Algeria’s Finance Bill (2018) declared the ban not only on trade but even on the ownership of Bitcoin and other cryptocurrencies. The county is aimed to introduce strict control over the matter and already reacts on violations of law with punishment in accordance with regulations. The ban restricts any illegal activities linked to the use of cryptocurrencies, such as tax evasion, money laundering, and drug dealing. The central bank is also backing the ban, to maintain a financial system and to avoid complications.
The Chinese government also took action against crypto operations and trade. China forbids ICO’s, trading networks fundraising tools and offshore cryptocurrency exchanges. The ban caused 6% decline in bitcoin prices. Financial institutions are also banned from any type of crypto dealing in crypto activities. The government aimed to prevent volatility in China’s capital markets and replenishment of the mass capital outflows. These regulations are designed to control and centralize non-regulated cryptocurrencies. Yet, Crypto trading continues in China. To deal in digital currencies many players switched to foreign exchanges.
In a developing country with a growing market-based economy, individual digital currency users are hunted by the police. As money laundering has been an issue in this country, sections of law regulate trading in foreign currency (1947) with control and authorization of Central bank. To say nothing of Central bank of Bangladesh highlighting the matter of decentralized payment system as a negative influence on people’s financial state. Money laundering control act of 2012 ban trading in digital currencies with the punishment consequences.
If there had been no ban, the issue of money laundering would be still remarked in the grey-list of Financial Action Task Force (FATF) without the control act of 2012 which provided safeguards against money laundering. Nevertheless, there is a large diaspora of migrants who send money home and the use of digital currency would facilitate an increase in the country's income. The Crypto Ban suspended a plan of Bangladesh bitcoin foundation (the first crypto foundation in Asia) to implement and develop cryptocurrencies in Bangladesh through education in the country’s official language Bengali.
Recently virtual currency trading was promoted in Saudi Arabia, following the reinforcement of illegibility of virtual currencies and the lack of license regulations on crypto trading. The claim was supported by the committee creation. Members of the committee involve the Ministry of Interior, The Ministry of Information, The Ministry of Trade and Investment, The Saudi Arabian Monetary Agency headed by the Capital Market Authority. Although Saudi Arabian bank is developing payment infrastructure by introducing Ripple technology and xCurrent, the perception of crypto trading is associated with high risks of scams, volatility and fabricated contracts. As it was described in the case with Egypt, religion may be also the cause of crypto trade perception as unethical.
Last year over 7 thousand of bitcoin and litecoin miners were approved by the customs department. To advance in the management of currency transactions, the Ministry of Finance, the Ministry of Justice and the State bank restricted equipment imports for crypto mining. In addition, the use of bitcoin and other virtual currencies as payment is forbidden as of October 2017. Bitcoin.vn, the largest cryptocurrency exchange in Vietnam was mostly affected by the constraints.
The boom in Indian crypto trade and investments was driven by the dramatic rate increase from $900 to $20,000 in 2017. That’s when the attention of government and Reserve Bank of India (RBI) to the matter was rather predictable. The establishment made “warning signals” to investors, highlighting the risks of fraud. Later, tax and financial authorities launched an investigation on crypto trading. The RBI banned crypto trading and ICO. The restriction is now on, however, the issue is still on hold, as the Supreme Court holds numerous crypto cases against RBI. Petitions to allow crypto trading until the case is resolved were declined by the court.
The Ecuadorian government is developing a national electronic cash system which will be fully centralized and state-controlled. As the means of protection, the government banned the use of cryptocurrency in any way.
The Central Bank of Bolivia issued a resolution that bans Bitcoin and any other cryptocurrencies that are not regulated by the state authorities(2014). The motive of such policy is the protection of national currency and country’s citizens from frauds and fictitious contracts and tenders. Several experts, like Sebastian Serano of Ripeo, pointed out that for such an underdeveloped economy decentralized economy would promote startups.
Canadian major banks are aimed to ban its customers from using credit and debit cards for crypto purchases. Recently, the Bank of Montreal and Toronto Dominion announced blocking the purchase of virtual currencies for its customers. The Royal Bank of Canada stated that cryptocurrency transactions would be allowed in restricted conditions.
Also, officials supported the Facebook’s earlier decision to ban advertisements for ICO and bitcoin and were in talks with Google where it was suggested to follow the practice of Facebook. Since then the social media giant reversed its decision do ban crypto-related ads.
Although there are no direct governmental “crypto bans,” the trend of crypto use restriction is highlighted in various financial and social spheres. Bitcoin can also be a subject of regulation by an anti-money laundering and counter-terrorist financing laws (2014).
Dealing with crypto trading in Iceland may go against Icelandic Foreign Exchange Act. The restrictions imply that financial institution is not authorized to transfer currencies across borders on the basis of transactions of digital currencies. The country has become “crypto miner’s heaven”, because of low electricity prices and country’s renewable energy resources. However, the government now questions the benefits and values of such actions. Mining sites do not create many local jobs, do not bring infrastructure investments, taxes and bills are relatively low. Authorities’ attention to these questions may raise a need of revisiting the aforementioned points: taxes and bills.