Cryptocurrencies such as Bitcoin have garnered much attention to the public on a global scale in recent memory. However, they are currently banned in nine countries – this article explores why.
There are parts of the world where cryptocurrencies are completely banned. At present, it is reported that there are nine countries. Almost all of them are in emerging markets and are mainly in the Middle East and Africa (MEA) as well as in Asia.
Cryptocurrency transactions are prohibited in Egypt, as what has been reported with the Egyptian Islamic advisory Dar al-Ifta believing that cryptocurrencies can be harmful to both the national security and economic health of the country. Article 206 of the Central Bank and Banking System Law promulgated by Law No. 194 of 2020 “prohibits the issuance of cryptocurrencies, trading in them, promoting them, establishing or operating platforms for their trading or implementing activities related to them.” The Central Bank of Egypt (CBE), despite that, has been undergoing various reforms to make Egypt competitive and push for wider economic development and diversification.
In the Gulf Cooperation Council (GCC) region, Qatar,s financial centre regulatory authority, the Qatar Financial Centre Regulatory Authority (QFCRA) announced, as reported, that all services involving cryptocurrencies have been banned throughout the Qatar Financial Centre (QFC), until further notice. They said, “Virtual Asset Services may not be conducted in or from the QFC at this time.”
A statement was issued by the Iraqi Central Bank in 2017 prohibiting their use and is still in force. In Iraq, despite attempts such as in 2017, cryptocurrencies remain popular. Early last year, the Ministry of Interior of the Kurdistan regional government issued similar guidance to stop money brokerages and exchanges handling crypto.
In Oman, a press statement was released in December 2017 by the Central Bank of Oman that stated cryptocurrencies is not a legal tender in the country. It also urged caution by Omani citizens and that they would assume the risk and responsibilities of using cryptocurrencies.
The 2018 Financial Law of Algeria has prohibited the use of any cryptocurrencies. As written in Freeman Law’s website, “The purchase, sale, use, and possession of so-called virtual currency are prohibited. A virtual currency is one used by Internet users over the Internet. It is characterised by the absence of physical support such as coins, paper money, or payments by check or credit card.”
While unclear on whether cryptocurrencies are legally completely banned, there were reports last year of the laws going to be changed to embrace it. This as reported was stemmed from a 17-year old Tunisian boy that was apparently arrested last April for using cryptocurrency for an online transaction. Much will be seen if the Central Bank of Tunisia will decriminalise the laws pertaining to cryptocurrencies.
Bitcoin and cryptocurrencies have been banned in Morocco since November 2017. Interestingly though is that Morocco has many fans of crypto, where it is the top country in terms of crypto trading and around a million of its population has crypto – the ladder stat according to cryptocurrency aggregator and provider Triple A.
China, which is one of the world’s largest cryptocurrency markets prior to joining the list of countries that ban it, made headlines last year by banning cryptocurrency training and mining. Nevertheless, the country is pursuing other uses of technologies such as blockchain and non-fungible tokens (NFTs). The People’s Bank of China said that “Virtual currency-related business activities are illegal financial activities,” and that it “seriously endangers the safety of people’s assets.” The same source highlighted that China’s announcement last year resulted in the fall of price of Bitcoin.
The country of 200 million people in South Asia back in 2017 had the Bangladesh Bank sent a circular through its website by asking all to refrain from trading virtual currency. The country’s banking regulator still does not allow or support trading of any cryptocurrency (for example Bitcoin, Ethereum and Ripple), Bangladesh Bank said in a statement today that was sent in July of last year.
Besides the nine highlighted, there are 42 other countries that have various levels of restrictions on cryptocurrencies. An example of one is Nigeria, where last year the Central Bank of Nigeria barred banks from working with cryptocurrencies.
Irrespective of the rise of crypto, there is a general global common consensus theme that there should be some form of regulation on this as it further evolves.
Will the list of nine grow? Notably, reports have circulated that Russia is considering banning cryptocurrencies. Only time will tell.