Since its inception in 2009, Bitcoin, as well as the numerous cryptocurrencies that followed it, has been fraught with controversy.
While Bitcoin has been extensively chastised for its volatility, usage in criminal activities, and excessive use of power to mine it, it is considered by others, particularly in underdeveloped countries, as a safe haven during economic storms.
However, as more individuals turn to cryptocurrency as an investment or a lifeline, these difficulties have emerged in a slew of new regulations on its use.
The legal position of Bitcoin and other altcoins (alternative currency to Bitcoin) varies greatly from nation to country, and in certain cases, the connection is still unclear or evolving.
While the majority of nations do not make it unlawful to use Bitcoin, its position as a form of payment or a commodity differs, with different regulatory repercussions.
Some governments have imposed restrictions on how Bitcoin may be used, including banks prohibiting their clients from transacting in bitcoin. Other governments have explicitly prohibited the usage of Bitcoin and cryptocurrencies, imposing severe fines on anybody who transacts in them.
These are the nations where Bitcoin and other cryptocurrencies have a tense relationship.
Algeria has banned the usage of cryptocurrency since enacting a finance law in 2018 making it unlawful to acquire, trade, use, or keep virtual currencies.
Since 2014, Bolivia has had a blanket restriction on the use of Bitcoin. The Bolivian Central Bank has issued a decision prohibiting it, as well as any other currency that is not controlled by a country or economic zone, from being used.
Throughout 2021, China will intensify its crackdown on cryptocurrencies. Officials in China have frequently warned its citizens to stay away from the digital asset market, and they have cracked down hard on mining in the nation as well as currency transactions in China and abroad.
On August 27, Yin Youping, the Deputy Director of the Users’ Bank of China’s (PBoC) Financial Consumer Rights Protection Bureau, described cryptos as speculative assets and advised people to “guard their purses.”
Efforts to destabilise Bitcoin, a decentralised currency independent of governments and institutions, often seen as a move by the Chinese government to launch its own e-currency.
The PBoC hopes to be one of the first major central banks in the world to establish its own digital money, allowing it to better supervise its citizens’ transactions.
The PBoC went even farther on September 24, outright prohibiting bitcoin transactions in the nation.
Financial institutions can not assist Bitcoin transactions in Colombia. Because they received cautions from the Superintendencia Financiera in 2014 that they could not “guard, invest, broker, or manage virtual money activities”.
In 2018, Egypt’s main Islamic advisory authority, Dar al-Ifta, issued a religious decision defining Bitcoin transactions as “haram,” or illegal under Islamic law. While not legally enforceable, Egypt’s banking rules were modified in September 2020 to make it illegal to trade or promote cryptocurrency without first obtaining a Central Bank licence.
From January 1, 2018, Bank Indonesia, the country’s central bank, established new laws prohibiting the use of cryptocurrencies, including Bitcoin, as a form of payment.
The Iranian authorities and Bitcoin have a complicated relationship. Iran has instead turned to the profitable activity of Bitcoin mining to finance imports in order to avoid the harshest effects of punishing economic sanctions.
While the Central Bank forbids the trade of cryptocurrencies created outside of the nation, it has provided incentives to encourage Bitcoin mining within the country.
Iran accounts for around 4.5% of global Bitcoin mining. With profits of over $1 billion (€843 million) estimated by blockchain analytics firm Elliptic.
Iran has provided licenced miners low-cost electricity in exchange for all mined cryptos sold to the Central Bank. In order for the crypto sector to thrive.
Unlicensed mining, on the other hand, drains more than 2 GW per day from the national grid. Resulting in power shortages.
Iranian officials responded by imposing a four-month ban on Bitcoin mining, which will last until September 22.
India’s stance on cryptocurrencies is getting increasingly unfriendly. On November 23, the Indian government declared its intention to present a new bill in the Indian parliament. That would create a new central bank-backed digital currency and outlaw nearly all cryptocurrencies.
It proposed making the holding, issue, mining, trading, and transfers of cryptocurrency assets illegal earlier this year. Prime Minister Narendra Modi expressed his desire to guarantee that cryptocurrency “does not wind up in the wrong hands, spoiling our young”.
Cryptocurrencies are growing in popularity in Iraq, despite officials’ best attempts to keep them out. The Iraqi Central Bank has particularly opposed them. It issued a declaration barring their usage in 2017 that is still in effect today. The Kurdistan regional government’s Ministry of Interior issued similar recommendations in early 2021. In order to prohibit money brokerages and exchanges from dealing in cryptos.
As of August 2017, the Nepal Rastra Bank proclaimed Bitcoin to be unlawful.
North Macedonia is now the only European nation to have an official prohibition on cryptocurrencies like Bitcoin, Ethereum, and others.
While Bitcoin is not illegal in Russia, it is the subject of a long-running controversy.
In July 2020, Russia established its first crypto-regulation regulations, recognising cryptocurrencies for the first time as taxable property.
Russian public personnel are likewise prohibited from possessing crypto assets under the rule, which took effect in January this year.
Russian President Vladimir Putin has frequently connected bitcoin to criminal behaviour, urging that cross-border crypto transactions should get special attention.
The prosecutor general suggested new legislation in July that would allow authorities to seize cryptos considered to have been obtained unlawfully, noting their usage in bribery.
As the Turkish lira fell in value, many people in Turkey resorted to Bitcoin. With among of the world’s highest levels of usage, rules arrived quickly this year, just as inflation spiked in April.
The Central Bank of the Republic of Turkey released a decree on April 16, 2021, prohibiting the use of cryptocurrencies. Including Bitcoin, to pay for goods and services, either directly or indirectly. The Turkish president, Ragep Tayyip Erdoan, went even farther the next day. He issued a decree adding cryptocurrency exchanges to a list of businesses subject to anti-money laundering and anti-terrorism funding regulations.
The State Bank of Vietnam has announced that the issue, sale, and usage of Bitcoin and other cryptos are prohibited as a form of payment. And that violators would be fined between 150 million VND (€5,600) and 200 million VND (€7,445). The government, on the other hand, does not prohibit Bitcoin trade or possession as an asset.