Bitcoin has gone from an idea to actual money you can use in the real world in just a few years, thanks to the massive potential it offers to the unbanked and underbanked. Unfortunately, not all governments agree with the sentiment despite the growth we’ve seen in the community.
Let’s go through the list of countries where Bitcoin is banned or is yet to accept it as a legal medium of exchange and see if we can pick out any patterns.
In 2018, Algeria passed a law that prohibited the use of any and all cryptocurrencies. The reason for this? The central bank of Algeria didn’t like that they were volatile and unregulated.
The country banned Bitcoin mining earlier on and would decide to ban the use of Bitcoin in 2017 after it stated that cryptocurrencies lead to terrorist funding and money laundering.
Bolivia banned the use of cryptocurrencies in 2014. They would double down on this in 2022 after placing a complete ban on all tokens, stating that their reasons revolved around the danger of scams and “major financial losses.”
China banned Bitcoin in 2021 after announcing that mining, storing, and trading the currency would be restricted immediately. This brought rumors of China’s government planning its own cryptocurrency to combat Bitcoin.
This rumor held more truth than people originally thought, as the government’s decision revolved around the use of the currency for everyday transactions. They have cited Bitcoin’s volatile price and decentralized model as the main barriers to this function.
The Superintendencia Financiera advised financial institutions against facilitating Bitcoin transactions in 2014. Specifically, they were told not to “protect, invest, broker, or manage” virtual currency operations. Colombia’s resistance to Bitcoin would come as a result of the lack of regulation and the currency’s volatility.
In 2018, Egypt’s main Islamic advisory body, the Dar al-Ifta, declared Bitcoin transactions “haram,” or prohibited under Islamic law. While this may not have been legal action, the country’s banking laws tightened considerably in 2020 to discourage trading Bitcoin without a Central Bank license.
Despite this barrier, Egyptian citizens are choosing to buy more Bitcoin. Access to the currency is difficult but Egyptian citizens are choosing to power through restrictive laws in order to acquire BTC.
Legal action has been threatened by the National Bank of Ethiopia (NBE) against those who don’t respect Ethiopia’s ban on Bitcoin. The central bank has cited issues surrounding the use of Bitcoin in informal financial transactions as well as laundering schemes as its reason for this ban.
Less than three months after this announcement, the government of Ethiopia took steps toward regulation rather than banning it outright. To this end, they have given cryptocurrency operators a 10-day ultimatum to register their operations with the Network Security Administration (NSA).
Ghana’s central government would associate Bitcoin with fraudulent online activity, leading them to prohibit the use of Bitcoin in the country.
While Bitcoin may be banned in Ghana, its central bank has still expressed its interest in integrating blockchain technology. Currently, they are studying its potential use cases and understanding how they can efficiently incorporate it into the country’s financial system.
With the fear of having Bitcoin end up “in the wrong hands” and consequently “spoil the youth,” the Indian government has made it clear that they are antagonistic towards Bitcoin adoption.
The government would consider criminalizing the storage, use, mining, and issuance of cryptocurrencies early in 2021. In November of that year, the government announced its plan to release a central bank-backed digital currency while banning most other cryptocurrencies.
The country turned to mining Bitcoin in order to combat economic sanctions. The central bank, however, insists on prohibiting the trade of cryptocurrencies mined in other countries.
Currently, Bitcoin miners in Iran provide 4.5% of the world’s total Bitcoin mining operations. In order to support this, the Iranian government offers miners lower energy fees but requires them to sell all their mined Bitcoin to the Central Bank.
The Iraqi Central Bank had previously stated in 2017 prohibiting the use of cryptocurrencies in the country. This was followed by an official guidance released in 2021 by the Ministry of Interior of the Kurdistan regional government, which confirmed the continued ban on cryptocurrencies due to their decentralized and unregulated status. Despite all that, Bitcoin has found traction with the population in Iraq and continues to grow in popularity.
In January 2022, the government of Kosovo announced a ban on Bitcoin mining due to energy shortages in the country. The country had been facing “historic” power shortages which have resulted in a strictly implemented scheduled power cuts. While mining may be banned, the use and storage of Bitcoin remains unrestricted.
The Mexican government has chosen not to view Bitcoin as a currency. Beginning in June of 2021, the government has announced a ban on all cryptocurrencies, stating that they aren’t legal tender in the country. Similar to Iraq, though, the popularity of Bitcoin continues to grow with the community.
The Moroccan Exchange Office has made announcements regarding the use of cryptocurrencies and has made it clear that these transactions are subject to penalties and fines.
This ban results from the fact that the Moroccan government wants its citizens to facilitate transactions through registered and regulated exchanges. Government agencies reiterate that chosen virtual systems of payments should be those backed by a financial institution.
However, the population of Morocco would beg to differ. Bitcoin usage continues to rise in the country and has developed an identity as a Bitcoin “Trading Hub” in Africa.
Qatar’s Central Bank issued a circular in 2018 which discussed the dangers of trading in Bitcoin and the declaration that the currency would be deemed illegal. As such, banks operating in Qatar are prohibited from dealing with Bitcoin and other cryptocurrencies. The government, however, has expressed interest in adopting blockchain technology for its uses in FinTech applications.
The Central Bank of Turkey would choose to ban the use of Bitcoin and other cryptocurrencies for goods and services on April 16, 2022. Turkish president Recep Erdogan would build on this, requiring all exchanges to subject themselves to anti-money laundering and terrorism financing regulations.
This comes after Bitcoin was used by Turkish residents to store their wealth after the Turkish lira plummeted in value. Turkey had seen some of the highest levels of adoption at the time but the regulation of Bitcoin has worried speculators.
Vietnam’s government would choose to allow Bitcoin trading and holding but prohibit its issuance, supply, and use as a means of payment. This comes with the threat of punishment through fines which range from 150 to 200 million USD.
The list of countries where Bitcoin is banned should grow shorter
It’s clear that after going through this list, the barriers to wider Bitcoin adoption revolve around older problems—rather, problems that have been addressed in the past. The progress we’ve seen the Bitcoin community and blockchain make in the short amount of time they’ve been active is astounding. That’s despite the different countries choosing to prohibit Bitcoin.
We’ve even seen cases where a country’s citizens choose to continue their usage of Bitcoin despite the lack of support from their government. If you think about it, it only makes sense since it removes the need for people to go through traditional financial institutions in order to securely store and use their money. The addition of the Lightning Network improves utility, as well, as it lets people use their money for quick and easy transactions. That only goes on to prove that Bitcoin is capable of empowering people, not markets.
All this is to say that Bitcoin is here for the long haul. We might not have reached its true potential yet but, based on the progress we’ve made, we’re well on the way to achieving Bitcoin for the majority. Who knows, the countries that banned Bitcoin may even adopt it as a legal tender in the near future. Only time will tell.