Bitcoin has been controversial since its inception in 2009, as have the cryptocurrencies that followed in its wake.
Although widely criticized for its volatility, its use in nefarious transactions, and for the exorbitant use of electricity to mine it, Bitcoin is seen by some, especially in developing countries, as a safe haven during economic storms. .
But as more people turn to cryptos as an investment or a lifeline, these issues have manifested themselves in a series of restrictions on their use.
The legal status of Bitcoin and other altcoins (alternative coins to Bitcoin) varies widely from country to country, while in some the relationship is yet to be properly defined or is constantly evolving.
While the majority of countries do not make the use of Bitcoin illegal, its status as a means of payment or as a commodity varies with different regulatory implications.
Some countries have placed limits on how Bitcoin can be used, with banks prohibiting its customers from making cryptocurrency transactions. Other countries have banned the use of Bitcoin and cryptocurrencies outright, with heavy penalties for anyone who trades crypto.
These are the countries that have a particularly strained relationship with Bitcoin and other altcoins.
Algeria currently bans the use of cryptocurrency following the adoption of a financial law in 2018 that made it illegal to buy, sell, use or hold virtual currencies.
The use of Bitcoin in Bolivia has been totally banned since 2014. The Bolivian Central Bank has issued a resolution banning it and any other currency not regulated by a country or an economic zone.
China has cracked down on cryptocurrencies with increasing intensity throughout 2021. Chinese authorities have repeatedly warned its people to stay away from the digital asset market and have severely cracked down on mining in the country as well as currency exchanges in China and abroad.
On August 27, Yin Youping, deputy director of the Financial Consumer Rights Protection Bureau of the People’s Bank of China (PBoC), called cryptos speculative assets and warned people to “protect their pockets.”
Efforts to undermine Bitcoin – a decentralized currency beyond the control of governments and institutions – are widely seen as an attempt by Chinese authorities to float their own electronic money.
The PBoC is seeking to be one of the first major central banks in the world to launch its own digital currency, and in doing so, would be able to more closely monitor the transactions of its staff.
In Colombia, financial institutions are not allowed to facilitate Bitcoin transactions. La Superintendencia Financiera warned financial institutions in 2014 that they cannot “protect, invest, negotiate or manage virtual money transactions”.
In Egypt, Dar al-Ifta, the country’s main Islamic advisory body, issued a religious decree in 2018, calling Bitcoin transactions âharam,â which is prohibited under Islamic law. Although non-binding, Egypt’s banking laws were tightened in September 2020 to prevent the trading or promotion of cryptos without a license from the Central Bank.
Bank Indonesia, the country’s central bank, has released new regulations banning the use of cryptocurrencies, including Bitcoin, as a means of payment from January 1, 2018.
Bitcoin has a complex relationship with the Iranian regime. In order to escape the worst impact of crippling economic sanctions, Iran instead turned to the lucrative practice of Bitcoin mining in order to finance imports.
While the Central Bank bans trading in cryptocurrencies mined abroad, it has encouraged the mining of Bitcoin domestically with incentives.
About 4.5% of global Bitcoin mining takes place in Iran, which blockchain analyst firm Elliptic says could represent revenues of over $ 1 billion (â¬ 843 million) .
For the crypto industry to thrive, Iran has offered licensed miners cheap energy, but requires all mined cryptos to be sold to the Central Bank.
However, unauthorized mining drains more than 2 GW from the national grid every day, causing power shortages.
To this end, Iranian authorities have banned Bitcoin mining for four months until September 22.
Nepal Rastra Bank declared Bitcoin illegal in August 2017.
North Macedonia is so far the only European country to officially ban cryptocurrencies, such as Bitcoin, Ethereum and others.
Although cryptocurrency is not banned in Russia, there is an ongoing conflict against its use.
Russia passed its first laws to regulate cryptos in July 2020, which for the first time designated cryptocurrency as taxable property.
The law, which came into effect in January this year, also prohibits Russian officials from owning crypto assets.
Russian President Vladimir Putin has repeatedly linked cryptocurrency to criminal activity, calling for more attention to cross-border crypto transactions in particular.
In July, the attorney general announced a new bill that would allow police to confiscate cryptos deemed to have been illegally obtained by citing their use for corrupt purposes.
Many in Turkey turned to cryptocurrency as the Turkish Lira fell in value. With usage levels among the highest in the world, the arrival of regulations has been swift this year as inflation peaked in April.
On April 16, 2021, the Central Bank of the Republic of Turkey issued a regulation prohibiting the use of cryptocurrencies, including Bitcoin, directly or indirectly, to pay for goods and services. The next day, Turkish President Recep Tayyip ErdoÄan went further and issued a decree ordering crypto exchanges to a list of companies subject to anti-money laundering and terrorist financing rules.
The State Bank of Vietnam has declared that issuing, providing and using Bitcoin and other cryptos are illegal as a means of payment and are subject to fines ranging from VND 150 million (â¬ 5,600) to 200 million VND (7,445 â¬). ).
However, the government does not ban Bitcoin trading or holding them as assets.