Can cryptocurrency be banned? The possibility of a country outright banning cryptocurrenies and bitcoin has been raised for more than a decade, but it’s becoming less likely as time goes on.
Since its inception in 2009, Bitcoin and the subsequent cryptocurrencies that followed in its footsteps have been fraught with controversy.
Despite its volatility, usage in illicit activities, and expensive energy consumption to mine it, Bitcoin is being seen as a haven by some, especially in developing countries.
However, as more individuals turn to cryptos as an investment or a lifeline, these problems have expressed themselves in a slew of limitations on their use.
The legal position of Bitcoin and other altcoins (alternative currencies to Bitcoin) varies greatly from nation to country, and the connection is currently unclear or evolving in certain instances.
According to many experts, Cryptocurrencies can’t be banned or outlawed since they’re just bits of computer code. Transferring cryptocurrency from one wallet to another is analogous to sharing music on a USB drive; thus, a legislative restriction will not prevent individuals from sending cryptocurrency.
“An asset, a commodity, a currency, or security, on the other hand, are all words that may be used to describe it. On the other hand, cryptocurrency has inherent value and liquidity.
Hundreds of millions of individuals across the globe are eager to own cryptocurrencies. I’ll give you some bitcoin in exchange for your return”. Last month, Chanpeng Zhao, CEO of Binance, the world’s biggest cryptocurrency exchange, said that it doesn’t matter if you call it a currency or not.
Unlike El Salvador, cryptocurrency has already been officially banned in several countries, whether Bitcoin or cryptocurrency can be banned has been answered to some extent.
Only a few nations, including Algeria, Turkey, Egypt, Nepal, China, and Pakistan, have enacted banning cryptocurrency and Bitcoin, making it illegal to communicate with, possess, or use the cryptocurrency in any way.
Since the birth of these digital currencies, China has been harsh with its regulations, with the Xi Jinping-led CCP cracking down increasingly harder each year. To cope with crypto giants like Bitcoin, China created its own centrally regulated digital money, the Digital Renminbi (RMB). But is this really banning cryptocurrency if a country makes its own digital currency?
China, home to some of the world’s largest crypto mining operations, has announced a nationwide crypto mining cleanup, which it calls “imperative.”
Although this isn’t the first time China has announced a crackdown on cryptocurrency-related activity, many official institutions have so far declined to comply.
Turkey was one of the countries with the highest number of transactions before the country’s central bank issued new guidelines prohibiting the use, essentially banning cryptocurrencies for any goods or services, directly or indirectly, as well as anti-money laundering and terrorism financing clauses.
The Nepal Rastra Bank issued a notification in 2017 prohibiting the use of, banning cryptocurrency.
Law authorities detained seven individuals for operating a cryptocurrency exchange shortly after receiving this notification, and they were facing fines and possibly prison time at the time. The case is currently ongoing.
Cryptocurrency transactions are banned in Egypt under the country’s Islamic legislation, according to the Egyptian Islamic advisory Dar al-Ifta, which thinks that cryptocurrencies may damage the country’s national security and economic health.
The bitcoin network is using an increasing amount of energy to mine bitcoins. Its overall power consumption has already surpassed the 2020 consumption threshold; last year, the network’s electricity consumption for mining bitcoins was projected to be about 67 terawatt-hours (TWh).
According to a Bloomberg research study, as the bitcoin price rises, more bitcoin miners join the network with less energy-efficient equipment to mine bitcoin, pushing the usage of energy to 91TWh by the end of 2021 — almost as much as Pakistan.
Many nations currently lack clear mechanisms to limit, regulate, or prohibit cryptocurrency, despite the fact that bitcoin is almost ten years old. Many governments have struggled to figure out how to enable legal usage while blocking illicit transactions due to bitcoin’s decentralized and anonymous characteristics. Many countries are still considering ways to regulate of down right ban cryptocurrency and bitcoin.
All in all, No one can ban investment in crypto, but only it’s legal status can be banned.
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