Though digital or virtual currency isn’t always aboveboard (seriously, the number of scams is shocking), there seems to be just enough merit in it that governments generally don’t seem to want to shut it down completely. A few countries beg to differ, though, and have prohibited trading in digital assets to some extent or another. So where is crypto illegal?
Key Takeaways: Crypto Bans
- Countries that ban cryptocurrency outright are few and far between; we only found eight that fit the bill.
- Many more countries, however, do have restrictions of some kind on crypto, so you may want to double-check what your country’s rules are regarding digital assets.
- Currently, only two countries have adopted Bitcoin as legal tender: El Salvador and the Central African Republic. However, things aren’t looking good.
We’ve identified eight countries that have either banned crypto trading or restricted it severely, and we go over them below. However, there are also two countries that have swung the other way and have in fact made crypto legal tender. Let’s take a look at all these polar opposites.
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It depends on where you are, but, yes — in most countries, creating a cryptocurrency is completely legal.
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Yes, the government — any government — can ban Bitcoin. Whether the ban sticks is another matter.
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Whether or not crypto or bitcoin mining is legal strongly depends on where you live, since countries (as well as local governments) have placed curbs to keep miners from frying electrical grids.
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There is not. Though the country doesn’t seem to be too fond of crypto, there’s no outright ban.
Where Is Crypto Illegal? A Full List of Countries
First, we’ll go over the places that have declared war on crypto in some form or another. Though these places don’t always agree on why there should be a crypto or bitcoin trading ban, they do agree that their citizens shouldn’t be allowed anywhere near digital currency. We’ll discuss them all in detail below.
Note that these countries have an outright ban on crypto; there are plenty more where crypto is restricted in some form or another with laws and regulations. Sometimes this is as simple as a ruling by a central bank that restricts crypto payments but allows trading; sometimes it takes the form of a limit on how much you can buy.
However, since many of these rules are open to interpretation, we’ve decided to leave them out of consideration. If you’re curious about your own country — or one you’re going to — and it’s not on this list, make sure to run a Google search at the very least to get some more information.
1. China
China is the biggest country to ban all crypto on its shores. It started with a ban on local cryptocurrency exchanges in 2017 and slowly progressed to a complete ban on all things crypto-related in September 2021. China Briefing has all the details.
Unlike most countries on this list, China’s reasoning for banning crypto has less to do with morals or fears of money laundering, and more with the central government’s worries that the crypto shadow economy could harm economic development in China. It’s a bit rich coming from a country suspected of fiddling with its economic metrics, but there you go.
2. Nepal
Nepal also banned crypto in September 2021. The Nepal Rastra Bank, the country’s central bank, declared its use, mining and trade illegal. The reason for this drastic decision seems to be a fear of swindlers, which seems pretty fair — the number of NFT scams alone could fill a book.
3. Afghanistan
Afghanistan also banned crypto in September 2021. After the takeover of the country by the Taliban regime, the economy — unsurprisingly — collapsed. The only way to transact business with the outside world was using crypto, and a large black-market economy sprung up.
The Taliban, not fans of free markets in any way, responded by not just banning crypto, but also harshly penalizing users and traders whenever they could. The Intercept has more if you’re interested, but the upshot is that as long as the Taliban holds power there, Afghanistan isn’t allowing crypto.
4. Bangladesh
Bangladesh joined the club a lot earlier than China or Nepal did, declaring all crypto-related activity illegal back in 2017. The government claimed that traffic in crypto would be in breach of the country’s anti-money-laundering laws and even an anti-terrorism law.
5. Morocco
Morocco also banned crypto a few years ago, but is the only entry on this list that may actually reverse the decision at some point in 2023. A law has been drafted that would change virtual currencies’ status in the North African kingdom, though it would still be a lot more strict than other countries’ rules for crypto.
As for the original reasons for the ban, they again center around the assumed criminality of crypto users, especially fears that financial institutions may not be able to identify streams of revenue. There are also concerns from scholars of Islamic law, some of whom contend crypto may infringe on the Muslim rules against usury.
6. Algeria
Algeria also has a total ban on crypto, though information is a lot more scarce. The best reports we found date from 2017 and state that a financial bill slated for 2018 would forbid virtual currency exchanges, trading and even holding any form of crypto.
7. Egypt
Egypt is the final North African country to forbid any form of crypto activity. The ban was enacted in 2020, with the central bank emphasizing that crypto’s value isn’t tied to any tangible assets and only recognized national currencies are allowed to be traded in the country.
8. Bolivia
Our final entry of this list is also the first country to completely ban crypto. As early as 2014, Bolivian lawmakers were worried about the effect the trade was having on their country and its inhabitants. That said, crypto advocates are working hard to get the ban overturned.
Countries Where Crypto Is Legal Tender
Clearly, none of the above nations are fans of crypto. However, there are two countries that not only join the rest of the world in allowing people to buy and sell crypto, but have actually made Bitcoin legal tender.
El Salvador, a small Central American country, has made Bitcoin a fully fledged currency alongside its own fiat currency — the colón — as has the Central African Republic.
However, before crypto fans start crowing about how these two countries could be shining examples of the future of crypto, things are not looking good. According to Bloomberg, El Salvador’s experiment with making Bitcon legal currency is “failing miserably,” for example, with the biggest news coming out of the country being an economic crisis and a political crackdown.
There is less current news about the CAR, but just a week after the news of the adoption of cryptocurrency in the struggling nation broke, Reuters already expressed serious doubt about its viability. We have a feeling that, in this case, no news does not mean good news.
Final Thoughts
Oddly enough, despite all the issues with Bitcoin, only a handful of countries ban cryptocurrency outright. Plenty more regulate it strongly, including not allowing it to be used for payments. Seeing the example of El Salvador and the CAR, though, you can’t help but wonder whether stricter countries don’t have it right.
On the other hand, a few countries are considering issuing stablecoins — crypto assets tied to their own currency that could be used to facilitate electronic payments. Called CBDCs, or central bank digital currencies, this could be a new way for crypto to go mainstream. That said, only the U.K. has made anything resembling concrete steps to implementing CBDCs thus far.
What do you think of crypto bans? Should crypto be legal, and legal tender everywhere, on par with fiat currency? Or can regulations not be tight enough? Let us know your thoughts in the comments below and, as always, thank you for reading.
The post Where Is Crypto Illegal in 2023? The Countries That Ban Cryptocurrency appeared first on Cloudwards.
