Cryptocurrency has been a controversial topic since its existence. It has been widely criticized for its volatility and its impact on the environment and is even known as a ‘Ponzi Scheme’ by leading economists. However, some countries still believe in the decentralization power of cryptocurrencies, such as El Salvador, which made Bitcoin a legal tender in September 2021, now followed by the Central African Republic in April this year.
The legal status of cryptocurrencies varies from country to country. Here we list all the major countries that made crypto legal, illegal, or unregulated (with some restrictions).
In 2018, Algeria passed a financial law that makes all cryptocurrency transactions illegal. This includes holding and trading any digital assets. Any violation of the law is subject to a crime and is punishable.
In 2014, Bolivia made cryptocurrencies illegal. The Central Bank of Bolivia issued a resolution that banned cryptocurrencies, instead of cases of theft and scams costing investors a fortune. According to the Bolivian government, cryptocurrencies should not be trusted as an investment.
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central bank of china in september 2021, made all cryptocurrency related transactions illegal and imposed a blanket ban, sending the strongest signal yet of its determination to crack down on the industry.
All cryptocurrencies, including Bitcoin and Tether, are not fiat currency and cannot circulate in the market, the People’s Bank of China said on its website. “All crypto-related transactions, including services provided by overseas exchanges to domestic residents, are illicit financial activities,” the PBOC said in the statement.
Cuba is the latest country to authorize and regulate cryptocurrencies like Bitcoin.
Egypt has classified cryptocurrencies like Bitcoin as prohibited under Islamic law. Dar al-Ifta, the country’s top Islamic advisory body, issued a religious decree in 2018.
The 2020 country tightened banking laws in September 2020 to prevent trading or promoting cryptos without a license from the Central Bank.
The European Union has not made the use of crypto legal or illegal. It recognizes Bitcoin and other digital assets as ‘crypto assets’.
In the meantime, European Union (EU) lawmakers are tightening the rules on the transfer of cryptocurrencies, in view of the increasing use of crypto assets for money laundering. According to Reuters, the new proposal will make it mandatory for cryptocurrency companies, such as exchanges operating across the EU, to obtain, hold and submit information about any of their users involved in any transfer.
The proposals aim to extend the anti-money laundering (AML) requirement, a rule already applicable in the conventional payment space. This would make it necessary for cryptocurrency exchanges to report to authorities if any transactions are made above EUR1,000 ($1,100).
In 2018, the Indonesian central bank issued new regulations prohibiting the use of cryptocurrencies, including Bitcoin, as a means of payment.
The crypto industry in Iran is unregulated, the Central Bank of Iran (CBI) in April 2021 authorized domestic banks and exchangers to use locally mined and licensed cryptocurrencies to pay for imports into the sanctioned nation.
The country has a ‘love-hate’ relationship with cryptocurrencies. Iran announced a four-month mining ban on energy-consuming cryptocurrencies such as Bitcoin after cities suffered unplanned outages due to massive crypto mining operations in the country.
Notably, about 4.5 percent of the world’s Bitcoin mining takes place in Iran, which, according to blockchain analytics firm Elliptic.
the Cryptocurrency and Regulation of the Official Digital Currency Bill, 2021 has not yet been submitted by the government. The bill seeks to ban all private cryptocurrencies in India, however it “allows certain exceptions to promote the underlying technology of the cryptocurrency and its uses,” the document read.
India has raised a 30 percent tax on crypto investors, and a 1 percent TDS on all crypto in-house traders. Currently, India has not regulated cryptocurrencies, but will not legalize them either.
the country is “fairly ready” with your consultation document on cryptocurrencies and has consulted national and institutional stakeholders, including the World Bank and the International Monetary Fund, said Secretary for Economic Affairs Ajay Seth.
In January 2022, the Russian central bank proposed to ban the use and mining of cryptocurrencies on Russian territory, citing threats to financial stability, the well-being of citizens and their monetary policy sovereignty.
The move is the latest in a global crackdown on cryptocurrencies, as governments from Asia to the United States fear that highly volatile, privately operated digital currencies could undermine their control of financial and monetary systems.
Russia has argued for years against cryptocurrencies, saying they could be used for money laundering or to finance terrorism. However, Russia’s leaders are using cryptocurrencies to circumvent the sanctions imposed by the US. and its allies after the Russian invasion of UkraineBlockchain analytics firm Elliptic said. The research firm has tracked down a Russian crypto wallet that has “significant asset holdings.”
In April 2021, the Central Bank of the Republic of Turkey issued a regulation that prohibits the use of cryptocurrencies in all its forms, directly or indirectly.
The United States
Cryptocurrencies are legal in the United States. According to the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN), Bitcoin is a convertible currency with a value equivalent to real currency or that can act as a substitute for real currency. The Internal Revenue Service has also classified Bitcoin as property for tax purposes.