United States
US authorities have not reached a firm consensus on cryptocurrencies. As of early November 2021, the Department of the Treasury has passed a series of regulations intended to monitor blockchain technologies, including cryptocurrencies, DeFi, NFTs, and others. However, the situation is far from stable, as supervisory agencies compete for the right to regulate certain areas of the crypto market. Cryptocurrencies themselves are not considered legal tender.
Meanwhile, the US leads in the number of Bitcoin ATMs—there are now more than 2,400 of them, and there are more than 1,000 still waiting to be installed. Canada comes second with 337 Bitcoin ATMs. In addition, the first Bitcoin ETF began trading on the NYSE at the end of October 2021 with the SEC’s tacit approval. Many brokers, such as the popular trading app Robinhood, provide clients with tools to operate in crypto markets. A variety of major networks are experimenting with accepting cryptocurrency payments. And yet, the US is still considered one of the most unfriendly countries to cryptocurrencies due to the severity of its regulators.
United Kingdom
Her Majesty’s Treasury often stresses that Bitcoin supports illegal activities. Moreover, the global adoption of the Ripple blockchain banking system raises questions about the UK government’s understanding of the need to legalize cryptocurrencies. Instead, they see BTC as a tool for money laundering and tax evasion.
The Exchequer planned to introduce cryptocurrency regulation by the end of 2018, but the process is still incomplete. Much of the delay is due to COVID-19 and Brexit’s overall effect on the UK economy. However, a positive trend emerged in October 2021. The UK Financial Conduct Authority (FCA) published a document that classifies crypto-assets and gives regulatory guidance. The document is of an advisory nature, but it may be London’s first step toward legalizing cryptocurrencies.
Russia
Russian President Vladimir Putin met with Vitalik Buterin, the co-founder of Ethereum, and many other blockchain experts at the St. Petersburg International Economic Forum. The issue of developing the first “multinational cryptocurrency” for BRICS and EAEU countries was raised.
Although cryptocurrencies in Russia are considered digital currencies, they are officially prohibited for use as a means of payment for goods and services. Crypto is only allowed as an investment object. The relevant Federal Law “On Digital Financial Assets and Digital Currency” came into force on January 1, 2021.
South Korea
In 2021, South Korea took several steps that derailed crypto activity in the region. Back in 2018, all anonymous cryptocurrency transactions were banned. Then in 2021, about 190 cryptocurrency exchanges, which serviced about 98% of all transactions in the country, ceased their work due to pressure from new restrictions by the nation’s regulator.
China
In 2021, China launched a large-scale campaign against cryptocurrencies, with the following key restrictions:
- mining was banned
- the sale of mining equipment was prohibited
- Chinese citizens were not allowed to use crypto exchanges
Earlier, there was a ban on ICOs and other crypto-related activities. This comes amid a massive implementation of the Chinese CBDC, which is already being tested by more than 140 million users. The official launch date of the digital yuan remains unknown, but it is expected to begin circulation in February 2022 during the opening of the Winter Olympics in Beijing.
Bangladesh
Bangladesh Bank officials banned the use of BTC in 2017, stating that “transaction with this currency may cause a violation of the existing money laundering and terrorist financing regulations.” The Bank circular mentioned that Bitcoin or any other cryptocurrency “is not authorized by any legal authority of any country and thereby no financial claims can be made against such currencies.” Citizens are urged to refrain “from performing, assisting and advertising all kinds of transactions through the virtual currencies like Bitcoin to avoid financial and legal damages.”
The Bangladesh Financial Intelligence Unit and the Foreign Exchange Inspection Department monitor compliance with the regulation.
Vietnam
Data shows that more than 55% of the Vietnamese population is connected to the Internet and more than 80% use smartphones. However, most adults do not have access to traditional financial services and do not use bank accounts. Furthermore, millions of Vietnamese immigrants work abroad, sending money home through Western Union and similar services with high transfer fees.
This seems like a great opportunity to integrate crypto technology, but local banks and financial institutions are prohibited from using cryptocurrencies as a medium of exchange. Thus, all cryptocurrency transactions are illegal. At the same time, digital currencies themselves are not outlawed—citizens can store them or invest in them safely.
Nepal
As of 2017, crypto trading and transactions are considered illegal and are banned by the Nepal Rastra Bank ordinance.
The official reason is that crypto transactions can be linked to the illegal outflow of national currency from the country. In October 2017, several people were arrested in different areas for exchanging BTC.
Pakistan
Bitcoin and other digital currencies, coins, and tokens are officially banned by the State Bank of Pakistan. The news was published on the bank’s website on April 6, 2018.
Citizens are not allowed to sell, buy, exchange or invest in cryptocurrencies. Any such transaction could lead to financial losses and legal consequences.
Authorities present the ban on cryptocurrency as a security measure, citing concerns that cryptocurrencies are unstable and provide a high level of anonymity. Consequently, they can enable illegal activities.
Bolivia
Since 2014, the Central Bank of Bolivia has considered BTC and altcoins as pyramid schemes and vehicles for fraud. Thus, Bolivia can claim to be the first to completely ban “any kind of currency that is not issued and controlled by a government or an authorized entity.”
ASFI, Bolivia’s Financial Regulatory Authority, reminds citizens that the use and circulation of virtual currencies are prohibited in the country. In 2017, 60 “cryptocurrency promoters” were arrested.
Thailand
Thailand is often listed as being crypto-unfriendly. On February 12, 2018, the country’s National Bank issued a circular urging financial institutions not to conduct business using cryptocurrencies. Major Thai banks have suspended some crypto transactions.
However, the situation could still change. The government is working on a bill that will regulate cryptocurrency activities, including initial coin offerings. So far, drafts of the relevant royal decree require all digital transactions, dealers and brokers to be registered by the authorities.
Summary
Most countries are gradually embracing cryptocurrencies. For example, the G20 Summit recently agreed that crypto-assets can bring significant benefits and cannot be seen as a severe threat to the global financial system. Although it was also mentioned that cryptocurrencies “raise issues with respect to consumer and investor protection, market integrity, tax evasion, money laundering and terrorist financing.”
At the time of writing, few countries completely prohibit the use of cryptocurrencies. In most cases, government agencies either restrict or control blockchain projects. At the same time, 80% of states are already developing their own analog to cryptocurrencies—CBDCs.
