You wouldn’t think that cryptocurrencies can be banned, would you? There are more benefits to investing in cryptocurrencies than drawbacks. Plus, in some countries like the USA, you can even buy goods and services with Bitcoin.
So why are there some countries out there that decided to ban digital money and make it hard for crypto enthusiasts to mine cryptocurrencies?
The main reasons some countries have decided on banning cryptocurrencies are the high costs of energy, decentralization, volatility and illegal activities that can be easily conducted using crypto.
Some countries like China may be concerned over decentralization. Using Bitcoins means you are no longer dependent on banks or financial institutions to hold or invest your money. I believe that China would have problems with people becoming more liberal when it comes to managing their finances. Being a communist country, I wouldn’t be surprised if that was true.
Other countries do not like the high cost of energy that cryptocurrencies produce. According to Digiconomist’s Bitcoin Energy Consumption Index, one Bitcoin transaction takes 1,449 kWh or 50 days of energy use for a US household. Now, multiply that kWh with a thousand or more transactions and you’ll know what I’m talking about.
However, if you are a cryptocurrency enthusiast who loves to travel and trade cryptos at the same time, find out which countries have banned cryptocurrencies so you could avoid them.
In late September 2021, China put a complete ban on all crypto transactions. All Chinese crypto exchanges left the country and were forced to take their business elsewhere.
The main reason China banned crypto trading was due to fears it will disrupt the current banking system.
Another country that put a full restriction on cryptocurrencies is Egypt. The central bank of Egypt issued a warning against crypto enthusiasts where if one is caught trading crypto, one risks imprisonment.
The reasons for the ban include high volatility involving cryptocurrency trading, the risk of financial crimes, and e-piracy. If one is caught issuing, trading, mining, or promoting cryptocurrencies, they risk imprisonment and a fine of no more than one million pounds and no more than LE 10 million ($516,340) according to Law No. 194 of 2020.
Qatar is another country angry about cryptocurrencies and their supporters. Qatar’s Financial Center (QFC) declared an official ban on all cryptocurrencies in December 2020. The reason for the ban is fear of increased illegal activities as a result of crypto trading. QFC has an anti-money laundering approach to reduce financial crimes in the country.
All in all, even if cryptocurrencies are well-regarded in some countries and crypto trading is considered a reliable business venture, some countries have decided they are not worth the risks.
Fears of money laundering activities and financial scams are the top reasons why countries like Egypt or Qatar look down on cryptocurrencies.
Marlena is a freelance writer and technology enthusiast with an interest in business, health, and cryptocurrencies. She has written for Thrive Global, Life Hack and Medium. You can say Hi to her on Twitter @MarlenaEeva.