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Why are these countries banning cryptocurrencies?

The relationship between governments and cryptocurrencies has always been strained. In some countries, the purchase and possession of cryptocurrencies and trading in them are now even completely prohibited.

Most of the (complete) crypto bans were introduced in 2017 and 2018. When central banks noticed the rising interest in cryptocurrencies, they no longer wanted to ignore the emerging market.

Even if most of the crypto bans were issued in these two years, there are always new bans for crypto currencies that cannot be controlled by governments or banks.

Turkey prohibits crypto payments

Recently, the Turkish central bank banned payments with cryptocurrencies. However, many already expected that this would happen, as the country had, among other things, tightened the laws for crypto currency exchanges in recent months.

The central bank justified the ban by stating that there are currently too few regulatory options and no central authority for the coins. They see this as a risk to investors as it may prevent them from getting back any lost funds.

Indian politicians want to ban private cryptocurrencies

India's government has not yet passed any anti-crypto laws. However, a bill banning private cryptocurrencies will soon be submitted to the Indian parliament. The Indian government wants to prevent the financing of illegal activities through cryptocurrencies.

However, the Indian government is not completely against digital currencies. It is considering introducing its own central bank digital currency (CBDC), the digital rupee.

Nigeria bans crypto services

Nigeria tightened anti-crypto measures in February 2021. The country is home to the largest African crypto market. Banks and financial institutions are no longer allowed to offer deposit and withdrawal options for cryptocurrencies.

In addition, the Central Bank of Nigeria threatened the other banks to close the bank accounts related to cryptocurrencies.

Bolivia was the pioneer in Latin America

Bolivia's central bank banned all decentralized cryptocurrencies in 2014. However, the Bolivian government took precautions to legalize cryptocurrencies that it could issue itself. This decision was made to protect the national currency and to protect investors. In 2014, Bolivia was the only country in Latin America that introduced a total crypto ban.

Ecuador follows Bolivia in banning cryptocurrencies

It wasn't long before the Ecuadorian government followed the Bolivian example.

In a vote by the National Assembly, the government of Ecuador changed the currency and financial laws that existed at the time. Payments with "electronic money" have been allowed since then. However, it has banned all cryptocurrencies that are not controlled by the state.

Algeria penalizes cryptocurrency use

In 2018, Algeria banned the use of cryptocurrencies. There is a specific definition for cryptocurrencies in the Arabic legal text:

“A virtual currency is a currency that is used by Internet users on the Internet. There is no physical basis for their use, such as coins, paper money, or payments by check or credit card ”.

Anyone who violates this prohibition is liable to prosecution under the existing financial laws.

Crypto traders from Nepal go to jail

The "Nepal Rastra Bank" banned cryptocurrencies in 2017.

Shortly after the announcement, law enforcement officers arrested seven people for running a cryptocurrency exchange. They are currently facing fines and possible prison terms. The case is currently ongoing.

South Korea bans privacy coins

Cryptocurrencies are legal in South Korea. Some major cryptocurrencies were even originally developed in this country. However, the country introduced a privacy coin ban in 2021. This affects cryptocurrencies such as Zcash (ZEC) and Monero (XMR). The government forced the South Korea-based Exchanges to delist these coins on March 21, 2021.

The South Korean government justified the ban on the fact that cyber criminals use this type of cryptocurrency. She also wants to use this measure to prevent money laundering. The South Korean government regards the high level of anonymity offered by privacy coins as too great an obstacle to law enforcement.

Qatar bans banks from trading cryptocurrencies

The government of Qatar warned banks against trading cryptocurrencies back in 2018.

In a circular from the Supervision and Control of Financial Institution division of the Central Bank of Qatar, she warned banks not to “trade or exchange bitcoin for another currency, or open an account to trade with, or transfer funds for the purpose to send or receive the purchase or sale of that currency. ”If caught, then according to the letter, you will face penalties as well.

In Egypt, crypto is haram

Cryptocurrencies are not directly banned in Egypt. However, in 2017, the Islamic legislature declared transactions with cryptocurrencies to be haram (prohibited). Dar al-Ifta believes that cryptocurrencies could harm the national security and economic health of Egypt.

Bangladesh threatens citizens with consequences

Cryptocurrencies have been banned in Bangladesh since 2017. Trading with unnamed people could violate the country's Money Laundering Prevention Act. The country's central bank has already warned its citizens of the possible consequences.

She urged citizens "to refrain from conducting, supporting and promoting all types of transactions with virtual currencies such as Bitcoin in order to avoid financial and legal damage."

Bans come and go, crypto remains

This list is incomplete. The cryptocurrency laws are also constantly changing. Since the mainstream acceptance of Bitcoin is growing, it is quite possible that the legal situation around the world will change again and again.

It looks like some countries want to be even more restrictive against cryptocurrencies. Others, on the other hand, apparently want to benefit from the potential that lies in cryptocurrencies. Most of those who want to do so, however, would like to introduce their own central bank digital currency.

It is still open how the individual countries will deal with crypto currencies. For most digital currencies, however, not much will change for the time being.

Translated by Maximilian M.

The article Why do these countries ban cryptocurrencies? first appeared on BeInCrypto.