Cryptocurrencies were invented with the intention to replace fiat currencies like USD or EURO. The goal was and still is to escape the governments’ and banks’ control, because cryptocurrencies are essentially decentralized, unlike fiat currencies. As such, it doesn’t come as a surprise that there are some countries that have banned cryptocurrencies and are actively against their use.
So where could you get arrested or fined for using cryptocurrencies? Here is a list of countries that are not friendly to crypto.
The use of Bitcoin and other cryptocurrencies is implicitly banned in some countries of the world. In the following countries, you could end up in jail or pay hefty fines if you happen to be a crypto enthusiast:
China has been cracking down on cryptocurrencies since the rise of Bitcoin in 2013. It began by regulating Bitcoin and restricting financial institutions from facilitating any cryptocurrency transactions. This was followed by an order from the People’s Bank of China requiring commercial banks to close all cryptocurrency trading accounts in 2014.
The crackdown on cryptocurrencies was revamped in 2017 when the government implicitly banned all cryptocurrency exchange platforms. The government also recently announced that it would not tolerate cryptocurrency mining either.
Interestingly, the Chinese still have a great appetite for cryptocurrencies. Here, away from the watchful eye of the government, the vast underground cryptocurrency markets are thriving.
Bitcoin and other cryptocurrencies have been illegal in Bolivia since 2014. The Central Bank of Bolivia issued a decree implicitly banning all cryptocurrencies and any other form of currency that is not regulated by the government. Breaching this law may result in jail term and/or fines.
Bitcoin and other cryptocurrencies are implicitly banned in Ecuador and there are strict laws against their use. The Ecuadorian government developed a digital money system in 2015 to fill the vacuum that Bitcoin would have fit in otherwise. However, Ecuadorian electronic money system is directly tied to the local currency and is simply a convenient means of monetary transactions.
Cryptocurrencies are banned in Colombia, but the government here has a much more relaxed attitude towards their use compared to some other countries on our list. For instance, Colombian government issued an implicit warning in 2014, cautioning banks and other financial institutions that they would be fully liable for any risks and losses from cryptocurrency transactions.
Cryptocurrencies are banned in Saudi Arabia. Nevertheless, like in Colombia, the laws here are lax. There is even a Bitcoin ATM in the city of Jubail and people use cryptocurrencies occasionally. The existing ban is more of a warning to financial institutions that they are wholly liable for all risks and losses arising from the use of cryptocurrencies.
Iran recently passed strict laws banning the use of cryptocurrencies. According to the Central Bank of the Islamic Republic of Iran, the ban was necessary to prevent the risks of terrorist financing and money laundering. However, many Iranians still use Bitcoin and other cryptocurrencies.
Bangladesh has strict laws against the use of Bitcoin and other cryptocurrencies. Using crypto coins is considered money laundering and can result not only in hefty fines but even in lengthy jail time. The law is being actively enforced: the police actively look for cryptocurrency users.
Pakistan is one of the latest countries to ban cryptocurrencies. The State Bank of Pakistan issued a decree in April 2018, stating that all virtual currencies were henceforth illegal. It also cautioned banks and financial institutions from facilitating cryptocurrency transactions, with emphasis on the risk and loss liability. Pakistani policies are expected to be ratified with time.
Nepal, like Bangladesh, is one of the few countries where using cryptocurrencies can get you a lengthy jail term and huge fines. Even though the laws regulating cryptocurrencies are somewhat ambiguous in this country, it is generally recommended not to transact in cryptocurrencies when in the country.
Some countries have legalized cryptocurrencies for public use but imposed strict laws heavily regulating or banning banks and other financial institutions from transacting cryptocurrencies. Below is the list of countries with cryptocurrency banking bans.
Canadians are allowed to use cryptocurrencies, but the government has comprehensive laws regulating this. For starters, cryptocurrency exchange platforms are regulated like any other financial services provider. Additionally, banks and financial institutions dealing in cryptocurrencies are required to register with the Financial Transactions and Reports Analysis Center of Canada (Fintrac). What’s more, foreign cryptocurrency companies with Canadian clients are also required to register with Fintrac.
All of these companies are also required to keep comprehensive records of all transactions and report any suspicious dealings to the relevant authorities.
The Central Bank of Jordan passed regulations banning banks, financial institutions, and payment services providers from transacting in cryptocurrencies. It warned that these entities were fully liable for any losses from cryptocurrencies and threatened jail time and huge financial fines as a means of deterrence. However, small businesses and the citizens are allowed to use Bitcoin and other cryptocurrencies for a wide range of uses.
Cryptocurrencies have been in use in India for some time now, but the government has recently initiated a crackdown on them. In early 2018, the Reserve Bank of India issued decrees against cryptocurrency transactions in commercial banks and financial institutions. This was shortly followed by an announcement by the Finance Minister, saying that the government was finalizing policies to ban the use of cryptocurrencies, fearing that they could be used for money-laundering and criminal purposes.
Nevertheless, cryptocurrencies are still widely used in India – in fact, India is one of the biggest cryptocurrency markets in South Asia at the moment.
Thailand was initially against any use of Bitcoin and cryptocurrencies in general back in 2013. However, it has since softened its position and instead passed strict regulations on how financial institutions and businesses dealing in cryptocurrencies should operate. Some of the requirements include having the Know Your Customer (KYC) policies as well as keeping comprehensive logs of all transactions.
Cryptocurrencies have a long way to go before they can become accepted worldwide. Despite the fact that there are crypto-friendly countries, there are some that have imposed implicit or banking bans on the use of cryptocurrencies. Conditions are expected to get worse in some of these countries while there is optimism in others.