Cryptocurrencies have taken over the world since 2009. In the beginning, there was only Bitcoin, but today there are more than 6,000 different digital currencies.
Although they are considered the currencies of the future, cryptocurrencies are also widely criticized for their volatility. More and more people make the decision to invest in cryptos, and at the same time more and more restrictions on their usage have shown.
As Bitcoin and other digital currencies may be legal in some parts of the world, in others that is not the case. Actually, cryptos themself are not illegal, but their status of payment varies with different regulations.
For example, in some countries, cryptocurrencies usage is limited in banking and making transactions. In other countries, there are some heavy penalties for anyone using cryptocurrencies for making transactions.
Let’s have a look at the countries where cryptocurrencies are limited or restricted.
Algeria
In Algeria, it is completely illegal to buy, sell, use, or have digital currencies. The prohibition follows a financial law from 2018.
Bolivia
Any currency, not regulated by the country or the economic zone, is banned in Bolivia. The Bolivian Central Bank issued a resolution in 2014.
China
China has put a regulation on cryptocurrencies, with an increased intensity in the last few months. Chinese people have been warned to stay out of the crypto market.
In August 2021, the Deputy Director of the Financial Consumer Right Protection Bureau of the People’s Bank of China, known as PBoC, claimed that cryptocurrencies are speculative assets, and warned people to “protect their pockets”.
All efforts for restricting Bitcoin and other digital assets seem like an attempt by the Chinese authorities to float their own digital currency. Actually, PBoC is trying to be the first major central bank to launch its own cryptocurrency, which will give it the opportunity to monitor people's transactions.
Since 24th September 2021, all cryptocurrency transactions in China are officially banned by PBoC.
Colombia
Colombia is another country that has banned all types of transactions with Bitcoin or other virtual money since 2014.
Egypt
In 2018, Bitcoin transactions were classified as “haram” - something prohibited under Islamic law. In September 2020, Egypt's banking laws became even more tight and trading and promoting cryptocurrencies without a Central Bank license was forbidden.
Indonesia
The use of cryptocurrencies was prohibited in Indonesia in 2018, by the country’s central bank.
Iran
The Central Bank in Iran prohibits trading with cryptocurrencies mined overseas, but encourages mining in the country. Actually, 4.5 % of the world’s Bitcoin mining takes place in Iran, which is about $1 billion.
Iran offers cheap energy to licensed miners, but has a requirement for all mined cryptos to be sold to the Central Bank.
Anyway, unlicensed mining drains more than 2GW every day, leading to power shortages, which caused a ban on Bitcoin mining (till September 2022).
Iraq
Although the Central Bank of Iraq has issued a statement in 2017 prohibiting the use of cryptocurrencies, they are extremely popular in Iraq. In the beginning of 2021, The Ministry of Interior of the Kurdistan regional government issued a guidance to stop crypto exchanges.
North Macedonia
That is actually the only European country to have an official law against cryptocurrencies.
Russia
In January 2021 a law came out that bans Russians from owning any digital currencies. The President of Russia has been linking cryptos with criminal activity. There is even a proposed legislation for allowing the police to confiscate illegally obtained cryptos.
Turkey
As the Turkish lira decreased its value, many people in Turkey turned to cryptocurrencies. As inflation peaked in April 2021, the regulations came out. The use of all cryptocurrencies was forbidden for paying any goods or services. The Turkish president also issued a decree saying that crypto exchanges to a list of firms subject to anti-money laundering and terrorism financing rules.
Vietnam
The Vietnam government does not ban Bitcoin trading or holding. At the same time, the State Bank of Vietnam has declared that the supply and usage of cryptocurrencies is illegal as a means of payment. The punishment ranges from €5,600 to €7,445.
While there are some countries that have regulations or restrictions on using and holding cryptocurrencies, there are many countries which support them or at least do not have any laws against digital assets. Anyway, crypto investment is always a risky process, and you need to be aware of every possibility before you make a step further.
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