Cryptocurrencies are not backed by governments or central banks.
Bitcoin has been controversial since its inception in 2009, as have subsequent cryptocurrencies that have attempted to follow in its wake of success and profit. While widely criticized for its volatility, its use in fraudulent transactions, and the exorbitant use of electricity it takes to create it, some, particularly in developing countries, see Bitcoin as a safe harbor in the midst of current economic storms.
But as more and more people turn to cryptocurrencies as a form of investment or as a lifeline, these problems have manifested themselves in a series of restrictions on their use. The legal status of Bitcoin and other altcoins (alternative currencies to Bitcoin) varies substantially from country to country, while in some, the relationship remains poorly defined or is constantly changing.
Although most countries do not declare the use of Bitcoin illegal, its use as a means of payment or as a commodity experiences variations with different regulatory implications. Some nations have placed limitations on how Bitcoin can be used, with banks prohibiting their customers from transacting with cryptocurrencies. However, other countries have outright banned the use of Bitcoin and cryptocurrencies, imposing heavy penalties on anyone transacting with digital money.
Here we reveal some of the countries where cryptocurrencies are restricted or illegal:
Algeria
Algeria currently bans the use of cryptocurrencies following the passage of a financial law in 2018 that made it illegal to buy, sell, use or even possess virtual currencies.
Bolivia
There is a complete ban on the use of Bitcoin in Bolivia since 2014. The Central Bank of Bolivia issued a resolution that prohibits it, as well as the use of any other currency not regulated by a country or economic zone.
China
The Asian giant has cracked down on cryptocurrencies throughout 2021. Chinese officials have repeatedly issued warnings to the population to stay away from the digital asset market and have clamped down on cryptocurrency mining in the country. , as well as in currency exchanges in national territory and abroad.
On Aug. 27, Yin Youping, deputy director of the People's Bank of China (PBoC) Financial Consumer Rights Protection Bureau, referred to cryptocurrencies as speculative assets and warned people to "protect your pockets." Efforts to undermine Bitcoin, a decentralized currency outside the control of governments and institutions, are largely seen as an attempt by Chinese authorities to make their own electronic currency flourish. The PBoC seeks to be one of the first major central banks in the world to launch its own digital currency, and in doing so could more closely monitor the transactions of the Chinese population.
Colombia
In Colombia, financial institutions cannot facilitate Bitcoin transactions. The Financial Superintendence warned banks in 2014 that they cannot "protect, invest, negotiate or manage operations with virtual money."
