Written by Nezwan Helmy
Whilst the majority of nations do not prohibit the use of crypto coins, the status of cryptocurrency as a method of payment or as a commodity, differs from country to country, with varying regulatory consequences.
Some countries have imposed restrictions on the way cryptocurrencies may be used; with banks forbidding their clients from engaging in crypto transactions in certain circumstances, whilst other nations have explicitly prohibited the use of Bitcoin and other digital currencies, imposing severe fines on anybody who engages in crypto activities.
Let’s take a look at several nations and their relationship with cryptocurrency:
People’s Republic of China
China has intensified its crackdown on cryptocurrencies, with the goal of completely eliminating them. Chinese authorities have frequently warned its citizens to stay away from the digital asset market, and they have imposed severe restrictions on mining, as well as on currency transactions in the nation.
In what could be viewed as an attempt to introduce their own e-currency to the international market, the use of which could easily be regulated amongst their people, the Chinese government attempted to weaken Bitcoin- a decentralised currency that is not under the authority of governments or institutions. Many of China’s financial institutions aspire to be the world’s major banks so that they can issue their own digital money, and by doing so, they will be able to closely monitor all transactions.
In 2018, Egypt’s main Islamic advisory body issued a religious edict categorising the transaction of cryptocurrencies as “haram” (illegal) which bans the act under Islamic law.
Egyptian financial regulations were tightened in September 2020, and citizens were prohibited from trading or promoting the use of cryptocurrencies without a Central Bank licence.
Comparatively, Iran has resorted to the profitable business of Bitcoin-mining to fund their national imports, in order to avoid the consequences of crippling economic sanctions in the country.
Whilst the Iranian Central Bank bans the trade of cryptocurrencies that are produced outside of the nation, it has provided incentives to promote Bitcoin mining inside the country.
As of yet, Iran is home to about 4% of the world’s Bitcoin-mining activity, which is estimated to generate profits of more than 725 million GBP. Iran has provided cheap electricity to licenced miners, in order to encourage the growth of the cryptocurrency sector – but it has also mandated that any cryptos produced, must be sold to the Central Bank.
Although cryptocurrency is not prohibited in Russia, there is a persistent campaign discouraging its usage. In July 2020 Russia established its first legislation to govern cryptocurrencies, which for the first time, defined cryptocurrency as a kind of asset which was subject to taxes.
Throughout his administration, Russian President Vladimir Putin has frequently connected cryptocurrencies to criminal activities, asking for closer monitoring of cross-border cryptocurrency transactions.
As the value of the Turkish Lira was depreciating, many people in the country resorted to cryptocurrencies. However, The Central Bank of the Republic of Turkey published a rule in early 2021 prohibiting the use of crypto (including Bitcoin) to pay for goods and services, either directly or indirectly.
In a subsequent order, Turkish President Recep Tayyip Erdogan added cryptocurrency exchanges to the list of businesses subject to anti-money laundering and counter-terrorist funding regulations.
According to the State Bank of Vietnam, Bitcoin and other cryptocurrencies are considered unlawful payment methods; yet the Vietnamese government does not prohibit the trade or ownership of Bitcoins as ‘assets’.
Tell Us Your Thoughts!
.These are several countries which have a complicated relationship with cryptocurrencies. Is your country included? Tell us in the comments below.