Bitcoin is a decentralized internet currency which was released for public investment and use in 2009. Surprisingly, in the years since its inception, it’s been a tumultuous ride for Bitcoin as public use of the coin has not increased in the ways the creators originally intended it to. And much of this is because there are numerous countries which have made Bitcoin, and other cryptocurrencies, illegal.
One of the largest countries to completely ban the use, mining, and sale of Bitcoins is China. When cryptocurrencies first became poplar, the Chinese population made up much of the market as they were quick to accept and mine the currency. As the coin rose in popularity, this made the Chinese government angry, because much of their society is based on socialist principals — which only works if the government is able to control the entire money supply. Bitcoin is decentralized, meaning it can’t be controlled by any individual or government, and the purchase and sale of the currency is done with some anonymity.
China didn’t just stop there, besides banning just Bitcoin, in 2017 the government also banned all ICOs (Initial Coin Offerings) for any other cryptocurrencies which may pop up. Although this sounds bad, reportedly many Chinese citizens are able to successfully buy and sell cryptocurrencies thanks to advanced internet technologies and the use of VPNs. This also doesn’t mean that the Chinese government is against cryptocurrencies — quite the opposite in fact. As recently as 2019, its been reported that the Chinese government continues to support the research and mining of cryptocurrencies, so basically, it’s not the cryptocurrencies they hate, the government just can’t stand that they can’t completely control them.
In March 2020, Russia released a new bill which would effectively ban all uses of cryptocurrencies. Previously the use of Bitcoin for payments and services was illegal, but mining coins such as Bitcoin and holding them as an investment, were otherwise unregulated. This all changed as the world began to face the coronavirus pandemic of 2020 and the economy began to destabilize. This instability scared the Russian government, who was already on the fence about cryptocurrencies for the same reasons as the Chinese government. Basically, cryptocurrencies and socialist regimes don’t seem to get along because of the decentralized and anonymous nature of these coins.
Unlike the two previously listed behemoths, while Bitcoin is effectively not considered a valid currency in Vietnam, there aren’t strict regulations on using it as an investment. Because investing in cryptocurrencies isn’t strict, there is still easy access to exchanges within the country although it is prohibited for financial institutions or merchants to have anything to do with the coins. A lot of this has to do with the fact that Vietnam is currently under economic reform, so the government wants to keep a close eye on the money supply. This doesn’t stop the Vietnamese people though, as many citizens see purchasing Bitcoin as a good and peaceful way to protest against the government and this new reform.
Bolivia is another country vehemently against the use, sale, and purchase of Bitcoin. The Bolivian government even goes as far to tell the general public that Bitcoin is a scam or a pyramid scheme in order to dissuade the public from buying the coins. Despite the government propaganda, Bitcoin still has a following in the country, namely a group which chats via an online chat room and meets under other, secret, pretenses. Unfortunately, sixty members of this group were caught and arrested in 2017. It is unclear if charges were ever pressed against the individuals for their use of Bitcoin, and unfortunately, much of the media sponsored by the Bolivian government cannot be trusted so it is unsure what happened to them, if anything.
Colombia is a confusing one when it comes to the legalities of Bitcoin. While the aforementioned countries are very clear on their stance when it comes to digital currencies, Colombia is a bit wishy-washy. The government continually insists that cryptocurrencies are “not banned” in the country of Colombia, however at the same time, the government tells the citizens that Bitcoin, and other cryptocurrencies, are indeed “not legal.” This creates quite the gray area which can be interpreted in a number of ways. A quick internet search shows it is quite easy to buy cryptocurrencies in Colombia, even using well known American apps such as Coinbase. Although it’s possible to buy crypto in Colombia, this doesn’t mean there won’t be any eventual repercussions and citizens do need to be careful with their involvement.
Another South American country with a negative view on cryptocurrencies is Ecuador, which effectively bans cryptocurrency in its entirety. The government claims this is because the use of online currencies would damage their new electronic money system. But let’s be honest, the banning of cryptocurrencies in Ecuador, much like China, has more to do with government fear of currencies they don’t control rather than “technological interference.”
Morocco and Algeria
Moroccan and Algerian authorities officially banned cryptocurrencies in 2017, stating that they were too likely to be used for criminal activities and that their outlawing was for the benefit of the consumer. Similar to Bolivia, the penalties for holding, buying, trading, or even mining Bitcoin in Morocco and Algeria are fierce, mostly fines, but also the possibility of facing serious jail time if caught.
Bitcoin was banned in Egypt in 2017 by authorities who posted a religious decree that the cryptocurrency was effectively against Muslim law. In the years since, Egyptian authorities have begun to realize that cryptocurrencies may possibly be the future and perhaps they should find a way to deal with them. Although cryptocurrencies in Egypt are still illegal at the publishing of this article, it is fairly easy to purchase and sell Bitcoin while within the country, and it doesn’t not appear that the civil penalties if caught are very strict as the country moves forward towards the possibility of acceptance and even considers creating their own cryptocurrency coin.
Bangladesh and Nepal
Since its inception, the Bangladeshi government has been very vocal of their dislike of the use of cryptocurrencies and Nepal was quick to jump on the bandwagon. Both countries have completely illegalized the use of cryptocurrencies or Bitcoin in any shape or form. While the Nepalese government doesn’t seem to impose any harsh punishments, anyone in Bangladesh found using cryptocurrencies will be jailed. And neither of these countries so any sign of loosening these restrictions any time soon.
What Should I Do?
While these aren’t the only countries which impose regulations on Bitcoins, these are the countries which are most vocal and have policies in place which could cause problems from the user. But that doesn’t mean everyone in the world is against Bitcoin, in fact there are many countries which promote, and even encourage their citizens to use cryptocurrencies. If you live in one of the countries in this article, it might be best to consider another investment other than Bitcoin. And even if you don’t live in one of these countries, it’s important to research the legalities (and any red tape) which may exist in your country’s regulations before you decide to invest.