Cryptocurrencies gained extraordinary popularity in 2021. Nevertheless, many countries have decided to ban or heavily regulate these volatile assets for various reasons. In 2021, cryptocurrencies took the economic markets by storm. While some countries have not outlined a strategy specifically regarding cryptocurrencies, others have decided to ban these assets altogether. The most important economic actor to ban these digital currencies is clearly China.
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In May 2021, the Asian country decided to ban Chinese financial institutions (mostly banks) from providing services related to cryptocurrency. And China is not alone. According to a November 2021 Law Library of Congress report, 51 countries have moved to ban cryptocurrencies, either indirectly or at all.
Apart from China, there is a complete ban on these digital currencies in eight other countries. Algeria, Bangladesh, Egypt, Iraq, Morocco, Nepal, Qatar and Tunisia have all decided to unilaterally ban exchanges and services surrounding cryptocurrencies. Most of the other 41 countries that have enacted regulations for digital assets are in Africa or the Arabian Peninsula. More surprisingly, according to the report, the only country located in Western Europe with implicit restrictions affecting cryptocurrency is Moldova. These rules prohibit banks, lenders and any other financial institutions from providing cryptocurrency-related services to their customers.
A critical year for regulation
Recently, India and Iran announced plans to enact new laws to ban cryptocurrencies. In its report, the Law Library of Congress lists 103 countries that subject digital currencies to tax laws as well as laws governing money laundering and the financing of terrorism. These rules apply to all EU countries except Bulgaria.
It looks like 2022 is likely to be a busy year for lawmakers around the world. The need for regulation of these digital currencies is increasing, and this year several countries have acted on the matter. The creation of state-backed digital currencies should still prompt overly liberal leaders to enact new measures, even if the cryptocurrency world remains opaque and difficult to govern.
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