In which countries is cryptocurrency outlawed?
Cryptocurrency adoption history is unique for each country and often resembles a swing from cautious support to a complete ban and back. This is the case in China and India, for example.
However, there are countries that have not changed their negative attitude towards digital currencies and blockchain technology for over a decade. According to the United States Library of Congress, as of December 2022, seven jurisdictions have completely banned cryptocurrencies. Additionally, digital assets are subject to criminal prosecution and administrative fines.
Here are these countries:
- Algeria. The 2018 financial law of Algeria prohibits the use of any money defined as "used by internet users through the internet". Cryptocurrencies cannot be bought, sold, stored, and used for commercial purposes. Mining is also prohibited.
- Bangladesh. The regulator acknowledges the importance of blockchain technology and considers it the foundation for business development in the country. However, it is extremely hostile to cryptocurrency. In 2018, the Bangladesh Central Bank warned that cryptocurrencies were illegal. According to an official statement, any transactions using digital currencies will violate existing rules on money laundering and terrorism financing.
- Egypt. In 2018, Dar al-Ifta, the chief Islamic legislator in Egypt, issued a decree classifying bitcoin operations as haram (forbidden by Islamic law). The decree states that cryptocurrencies harm Egypt's national security and financial system and can be used to finance terrorism. At the same time, miners are considered money senders, and these rules also apply to them.
- Iraq. The Central Bank of Iraq in 2020 published a statement banning cryptocurrencies. It states that currency traders and investors will be punished under the money laundering law. Iraqi legislation equates money laundering with terrorism financing. And since funds are required to commit terrorist acts, their financing is as serious a crime as terrorism itself, and is punishable by the highest penalty.
- Morocco. In November 2017, the Moroccan regulator issued an official statement that any actions taken using virtual currencies are a violation of exchange rules and entail sanctions and fines. Repeat offenders will face criminal penalties.
- Nepal. On August 13, 2017, the Nepalese Rastra Bank issued a notice that all transactions related to bitcoins are illegal. At the same time, seven Nepalese were arrested for the first time for exchanging bitcoins. They received prison sentences ranging from 5 to 12 years.
- Qatar. In February 2018, the Supervision and Control Department of Financial Institutions of the Central Bank of Qatar issued a circular to all banks operating in Qatar. The circular warned of cryptocurrency illegality. The ban applies to "anything of value that acts as a substitute for currency, that can be digitally traded or transferred and can be used for payment or investment purposes".
It should be noted that in 2021, there were 9 such countries. Tunisia and China are absent from this list, whose regulators have taken a softer position towards digital assets.
But we believe that the list is not complete and suggest expanding it to include countries where there is no official ban, but no cryptocurrency activity: Bolivia; Burundi; Gabon; Congo; Senegal; Mali.
Citizens of these countries have never registered on crypto platforms, and there is no information about blockchain-related projects there.
There are also countries that do not explicitly prohibit Bitcoin at the legislative level. However, they have an implicit ban in the form of regulators blocking any crypto initiatives. The state blocks financial institutions from serving digital companies and private crypto investors.
There are about fifty such countries. Their citizens can trade on foreign exchanges and cash out their profits through intermediaries. Since this is not officially prohibited by law, there are no penalties for such actions. One such jurisdiction is Sudan, where electronic money is de jure prohibited. However, the Electronic Transactions Act was adopted in 2007 before cryptocurrencies, so they are not formally prohibited. They simply do not exist in law.
Yemen also falls into this category, a country experiencing the largest humanitarian crisis due to the civil war. Under these conditions, cryptocurrency has become a weapon. Currently, half of the country is controlled by the Houthi armed group supported by Iran. Iran has developed and uses its own digital currency, eRiyal. In addition, cryptocurrency is used to collect charitable contributions to help the civilian population.
