Cryptocurrencies are virtual monies which can be used for peer-to-peer exchanges in between two devices that are connected to a network known as the Blockchain. The latter uses cryptography as a means of security which also guarantees that exchanges made using the Blockchain cannot be falsified. As an added layer of security, it also uses input from its users for issuing and settling transactions.
Each one of its attributes, which separates it from traditional currency, are, depending on the country that you are in, reasons for its condemnation. Its non-physical form, its decentralization or its ability to be created (mined) by any individual who wishes to do so, are only a few reasons, among many, as to why certain countries oppose its use.
Although Japan was the first country to give credibility to Bitcoin, many other countries are completely against the idea and would like to see cryptocurrency banned within their borders. One of the major reasons that set most Asian countries against the trade of cryptocurrency was a recent hacking that took place on the Mt. Gox exchange, which saw losses of more than $400 million dollars.
In November of 2017, authorities in Nepal arrested the owners of Bitsewa after being found guilty of racketeering. Although legislation in Nepal does not specifically cover cryptocurrency, the arrests were made under the Nepal Rastak Bank Act.
Under article 113 of Algeria’s 2018 finance laws, the country specifically bans the purchase, sale, trade, and possession of virtual currency. The article provides “penalties for those who violate the provision”, however, it does not specify what the penalties are.
Since 2014, Ecuador has condemned the use of Bitcoin and all other cryptocurrencies since the government considers them a tool for American imperialism. Despite this, the National Assembly of Ecuador has been encouraging the development of a national cryptocurrency called the Escudero.
In May of 2017, Bolivia completely prohibited the use of cryptocurrency after a group of developers, who promised 300% gains in only 60 days, were found guilty of operating a Ponzi scheme. After citizens began to protest, the government decided to step in and ban all cryptocurrencies called deeming their usage as a pyramid scam.
About 60 people were arrested in connections to the scandal and several miners were even accused of disturbing the countries power grid due to their activities. After, Lenny Valdivia Bautista, the man in charge of supervising the country’s financial system, made an official statement reminding citizens that “the use of virtual currency of any sort is prohibited.”
In 2014, Kyrgyzstan’s banks declared the use of Bitcoin and any other cryptocurrency as illegal while reminding its citizens that only the use of the Som, the country’s national currency, is sanctioned by the government.
On November 20th, 2017, Morocco became the first African country to officially ban the use of cryptocurrencies. The country’s central bank declared cryptocurrencies as “occult” and for the country’s Exchange Office, any transactions made with virtual currency are punishable by up to 5 years in prison and fines from €44 to €1,767.
Although cryptocurrencies are beginning to catch on at a global level, there are still several financial systems, central banks, and governments that are trying to restrict their use.
Although Iceland is home to one of the world’s largest mining systems due to its lower temperatures, its government has banned the trade of virtual currency for all public officials. Elsewhere, in South Korea, which represents the world’s largest crypto-market with 20% of the world’s trade volume, the government had to step in and ban the trade of cryptocurrency during working hours.
China is another country working to censor the use of cryptocurrency. Although there is no legal framework which prohibits its use, the People’s Bank of China, a state-run bank, has established preventative measures to restrict any activities related to cryptocurrency, from advertisements to the practice of mining. Still, China remains one of the biggest markets for the trade of cryptocurrency.
Declarations from other world leaders and national banks have been equated to banning the use of cryptocurrency, however, most have had to re-explain their statements as a warning to citizens. This has been the case notably in Nigeria, Vietnam, and China.
In Thailand, which once opposed the use of cryptocurrency, the government has made a complete turnaround and has recently signed a memorandum for the virtual currency OmiseGo to assist the government in several financial and technological sectors.