Governments from around the world have a different view of cryptocurrency. Some view it as a scam—nothing more than a fad that has the potential to destroy an economy. Some view cryptocurrency as legal tender.
Which countries ban cryptocurrency and which ones do not? What are the pros and cons of each decision? You will get answers to all that and more today.
Countries That Banned Cryptocurrency
There are five countries that banned cryptocurrency. These are:
China has long been against cryptocurrency. What’s ironic is that it is the top producer of bitcoin. The country’s president, Xi Jinping, has a major crackdown on all cryptocurrencies. These regulations and crackdowns are getting more and more intense every year.
The Chinese government introduced an alternative to cryptocurrencies. It is the Digital Renminbi, which people commonly refer to as RMB.
In Bolivia, there is a complete ban on cryptocurrencies that did not go through the scrutiny of the government. They have a regulations board for its economic system, and they believe that many cryptocurrencies are merely Ponzi schemes.
In Indonesia, there used to be a time when the government had specific sets of rules to control and regulate the distribution of cryptocurrencies. However, they put a complete ban on digital tokens in 2018. What this means is that the government does not allow cryptocurrencies as a mode of payment.
Turkey experienced a massive number of cryptocurrency transactions before the central bank imposed its ruling. Today, it is illegal to use cryptocurrency in the country for all goods and services. Lastly, Egypt banned cryptocurrency because it is considered a “haram” in Sharia Law.
Pros and Cons of Banning Cryptocurrency
Is there something good that will come out of banning digital coins? Is it all evil?
Here are the pros of banning cryptocurrency:
Less Likely to Get Scammed
People receive protection from cryptocurrencies that have no real value. There are people out there who make cryptocurrencies, sell them, and then disappear.
It is also not unusual for people to create new digital coins in the guise of charity. A good example of this is the Faze Clan. What they did, however, was the classic pump and dump scheme. They made people believe that the crypto they released had massive value, but it had none.
More Environmental Benefits
It takes a lot of power to produce digital coins. The computers that run and produce them need electricity. In the whole world, the leading source of power is fossil fuel. As computers are put hard at work, they need more electricity, and therefore more fuel. The result of all these activities is a more carbon footprint in the environment.
Less Criminal Activities
The cryptocurrency world is mired with dirt. Many criminals who sell illegal drugs and weapons use cryptocurrencies. They do this because the digital coins allow them to become anonymous. No entity can trace their transactions.
Now, here are the cons of banning cryptocurrencies:
Fewer Alternatives for Purchasing
There are many merchants who accept cryptocurrency because they want to invest. Instead of buying the digital asset themselves, they would rather that it comes from someone else. In exchange, they would send out their goods or provide services to people who can send them the crypto coins.
If you ban cryptocurrency, the people do not have any choice but to depend on the global values of fiat money. If the merchant does not accept a customer’s currency, the customer has to pay exchange rates and all that before he can buy something online.
No Transactional Anonymity
People will transact at no risk of exposing their identities. For example, they can send and receive cryptocurrencies in casinos like online casino in Japan.
Currently, there are many banks that do not allow credit card transactions to participate in gambling facilities. As such, people cannot entertain themselves. They cannot go to an online casino like Vulkan Vegas to play.
So, what is the solution? The solution is to have an asset that is not within the control of the government. What happens is that credit cards cannot be used in gambling facilities, but people can use an alternative.
Less Secure Ownership and Transfer
In cryptocurrency, your asset is yours. You have a private key and a public key. If you lose this key, it is gone forever. What this means is that you are responsible for your crypto asset.
The transfer of the asset is easy. What this means is that you do not need the approval of a bank. There is no need to sign papers, let alone visit the bank and appear in person. If you ban digital currency, the movement of money is too slow.
Cryptocurrency is here to stay. Whether or not the government likes it, a digital token is a future. One day, countries will have reliance on digital tokens instead of cash. With digital transactions, it is not likely for people to steal your money.
If there is one thing that the government must do, they need to regulate the processes. The regulatory requirements will prevent people from pumping and dumping cryptocurrencies. It will keep the financial environment safe. More importantly, people will not fall victim to wild speculations and valuations.