An Overview of Cryptocurrency

To refresh our understanding of the basics, let us start with what cryptocurrency is. Cryptocurrency, or as some say, crypto, is a digital or virtual currency created with encryption algorithms and secured with cryptography. It is meant to function as a means of exchange between computer networks and is not dependent on central authorities like banks or the government to regulate or maintain it.

The cryptocurrency was first mentioned in 1989, but that was only a mention. In January 2009, the first cryptocurrency, Bitcoin, was created by an individual or individuals under the pseudonym “Satoshi Nakamoto”.

Bitcoin was the only cryptocurrency for a while in the market, which anyone could obtain at just a few cents. Over the years till now, we have witnessed its growth, and other cryptocurrencies have come to play in the market. As of 2023, the global crypto adoption rate is estimated at 4.2%, with over 420 million crypto owners and users around the globe.

With this growth in the cryptocurrency space, there are still countries strongly opposed to the idea of digital means of exchange and do not show signs of adopting crypto any time soon.

Countries Where Cryptocurrency is Banned

Although there are countries with implicit bans on cryptocurrency, here are five countries with a total ban on cryptocurrency;

Qatar

Qatar, officially the State of Qatar, is a country in West Asia located in the Middle East. Being an oil-rich country, Qatar is one of the countries with the lowest tax rates in the world, with an unemployment rate of 0.13% and a gross national income of $190.01B in 2022. It hosted the most recent FIFA World Cup in 2022 and has been a center of attraction ever since.

As of December 26, 2020, cryptocurrency was completely banned in Qatar. The country states that its ban is due to weak compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations and to prevent cryptocurrency use for financing terrorism.

China

China, officially the People’s Republic of China, is a country in East Asia. It is the second most populous country in the world, just behind India, and has the second-largest economy in terms of GDP and the world’s largest purchasing power parity as of 2022.

Although China was one of the most popular places for Bitcoin mining companies, the Chinese government banned all cryptocurrency-related activities in 2021 when it directed all financial institutions from clearing and exchanging and declared mining illegal in the country. The government stated that the reason for this ban was because it was concerned about cryptocurrency mining's effect on its environment and the use of digital currency for money laundering and fraud.

After putting these measures in place, the country thought to introduce its digital currency, the Digital Yuan. A major difference between Digital Yuan and cryptocurrency is that it is a legal tender with legal status.

Algeria

Algeria, officially the People’s Democratic Republic of Algeria, is a country in North Africa. Algeria is the largest nation and ninth richest country in Africa. The country is highly reliant on energy exports in natural gas and oil and is classified as an upper-middle-income nation.

In 2018, the Financial Law of Algeria prohibited the use, sale, ownership, and purchase of any cryptocurrency, stating that any violation of the law is punishable in accordance with the laws and regulations in force. The Algeria government based its ban on the argument that these cryptocurrencies are not backed by anything physical and are seen as unstable.

Bolivia

Bolivia, officially the Plurinational State of Bolivia, is located in western-central South America. Despite being a historically poor country, Bolivia in 2016 attained the highest proportional rate of financial reserves of any nation in the world. Having the world’s largest lithium reserve, mining is a major sector of its economy.

In 2014, the Bolivian government issued an absolute ban on all cryptocurrencies not under their direct regulation. The ban prohibits using, marketing, or transacting crypto assets in the national payment sector. The central bank gave reasons to justify its crypto ban, stating that it was necessary to protect the public from risk and fraud and to prevent tax evasion and monetary instability in the country.

Nepal

Nepal, officially the Federal Democratic Republic of Nepal, is a country in South Asia known for having eight of the world’s tallest mountains. The economy of Nepal is in the developing category and is largely dependent on agriculture. It is classified as a lower middle-income economy and has consistently ranked as one of the poorest countries.

Since September 2021, the Nepal Rastra Bank has placed a ban on cryptocurrency trading and mining in the country. Despite Nepal’s early adoption of cryptocurrency, the NRB made the U-Turn, stating that cryptocurrency could result in potential revenue loss, as they are not subject to taxation due to the lack of proper regulations. Additionally, on January 8, 2023, the Nepal Telecommunications Authority directed all internet service providers to stop websites, apps, or online networks linked with cryptocurrency from functioning.

Note

These Countries are off the cryptocurrency wagon with laws and policies in place against those who decide they are above the law, and they have not decided when or if they will jump on this wagon sooner or later. So, in case you, as a crypto enthusiast or holder, decide to start a new life in another country or go for a long vacation, make sure to check if the rules and policies of that country align with your needs and want before making that move.