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Number of nations that have outlawed Bitcoin has doubled in 3 years

Number of nations that have outlawed Bitcoin has doubled in 3 years
Jordan
Major
6 months ago
3 mins read

Given the rapidly growing crypto market, many policymakers around the world appear torn between embracing Bitcoin (BTC) and other cryptocurrencies or restricting their usage.

The number of countries that have completely or partly banned Bitcoin has more than doubled in the last three years, according to a recent study by the Library of Congress of the United States.

In particular, the study splits the list of nations between those that have enacted regulatory measures allowing for their usage and those that have prohibited their use. Prohibitions are classified into two types: absolute and implicit.

By November 2021, nine governments had vetoed or prohibited all commercial activity involving cryptocurrency usage, as per the research. The nations include China, Algeria, Morocco, Tunisia, Egypt, Iraq, Nepal, Qatar, and Oman that have a complete ban on Bitcoin.

Countries that have applied prohibitive policies are marked in red, while in blue nations with implicit regulatory policies are indicated. Source: Library of Congress.

Notably, the 2018 study revealed eight jurisdictions with an absolute prohibition and fifteen with an implicit prohibition; the November 2021 update lists nine jurisdictions with an absolute prohibition and 42 with an implicit ban, meaning the latter more than doubled the 2018 total prohibitions.

What are the absolute regulations?

Absolute regulations are described as having a complete and entire veto over the usage of cryptocurrencies in any form. Occurring when there are rules in place on the part of the states that define its usage as a criminal offense. 

However, implicit rules are those that prohibit corporations and financial institutions from employing cryptocurrencies but do not prohibit people from possessing them.

It should be emphasized that, over the same time period, plans have also been adopted in favor of the acceptance of Bitcoin and other cryptocurrencies, as has been the case in El Salvador, among other countries. In that Central American nation, legislation was approved in September 2021 that recognized Bitcoin as legal tender for all transactions. 

In addition, regulatory measures in Latin American nations like Paraguay, which is establishing laws to encourage the use of cryptocurrencies, are making strides forward in this regard. This is also true in the case of Costa Rica, a country that, according to some analysts, has the best regulatory environment for the adoption of Bitcoin.

In a recent report, Finbold highlighted that Peru had seen a surge in the adoption of Bitcoin in recent years, with the usage of cryptocurrencies in that country increasing by more than 600% in a year, a bill aimed at providing a legal foundation for the cryptocurrency market in Peru had been submitted to the Peruvian Congress, which will debate the plenary legislation.

Anti-money laundering and taxes 

Additionally, the report offers a list of nations that, although not prohibiting the usage of cryptocurrencies, have enacted rules across the range of taxation and anti-money laundering (AML) measures. 

Comparative Summary: Regulation of Cryptocurrency Around the World. Source: Library of Congress.

According to the research,103 nations now have anti-money laundering measures in place. Cryptocurrency proponents often criticize these because they potentially jeopardize the anonymity that some Bitcoin users demand. In  2018, just 33 states had adopted this legislation, implying a 300% increase in only three years. 

AML standards do not imply limitations on the usage of cryptocurrencies since this sort of policy is often applied on exchanges or crypto trading platforms, rather than on self-security wallets.

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Jordan Major
Author

Jordan is an investor and market analyst. He's passionate about stocks, ETFs, blockchain, and digital assets. At Finbold.com, he delves into the technicalities to obtain future trends for new market traders and gives insights into user-friendly platforms for beginners.

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