At the time of its launch back in 2009, Bitcoin was the world’s first-ever fully operational cryptocurrency. Incidentally, it also remains as the most prominent despite the competition with several hundred other cryptocurrencies that have been launched since. A few interesting altcoins are EOS and Ripple.
It marked a whole new era in the forex market, one where virtual currencies were no longer just a concept; they were real, and you could make real fiat money by trading them.
Not surprisingly, traders all over the world want to know if this fairly recent surge in popularity for cryptocurrencies will last. Various financial institutions are now making frantic attempts to figure out the future of Bitcoin and how that may influence online trading markets in general. On top of that, traders are also keen to know where trading Bitcoin is legal and illegal. And when discussing the legality of Bitcoin, it all comes down to location.
Being a cryptocurrency, Bitcoin is not in any way regulated or supported by a central authority such as a bank or government. Its production is handled by a computer system known as mining. Bitcoin is also a peer-to-peer system of payment. None of it actually exists in the physical world, only online. Moreover, it can facilitate cross-border transactions without any exchange fees and enables users to remain anonymous. This is a good indicator of an established cryptocurrency system despite the fact that there are no international laws that cover Bitcoin trades.
Where Bitcoin Is Illegal
Bitcoin is actually a widely accepted cryptocurrency on an international level. However, there are some nations that take exception to the risks that it poses, contending that its extremely volatile behavior and decentralized setup are a major threat to the prevailing monetary system. There have also been cases where Bitcoin has been a tool for better concealing criminal activity such as money laundering and drug trafficking. Some nations have banned it upfront while others refuse to provide the essential banking and financial support to facilitate its trades. Let us now take a look at some of these nations that are officially opposed to the trading of Bitcoin within their shores.
Following the international economic crisis of ’08, Iceland has enforced rigid capital control when it comes to its monetary policies in an effort to secure the outflow of its local currency. Part of that effort involves the banning of Bitcoin trading with Foreign exchange since Bitcoin does not comply with Iceland’s Foreign Exchange Act. Intriguingly, there is a new cryptocurrency that has launched from Iceland called Auroracoin. It is intended to be an alternative cryptocurrency that is also compatible with Iceland’s current banking system.
Both Vietnam’s government and state bank have taken a strong stance against the legitimacy of Bitcoin as a means of payment. It is therefore illegal for both citizens and financial agencies have any dealings with Bitcoin.
It is illegal to use Bitcoin and altcoin as a method of payment in Kyrgyzstan.
Bolivia is another nation whose central bank is firmly against the trading of Bitcoin as well as other cryptocurrencies.
A majority vote within the national assembly ended up in favor of banning Bitcoin as well as other cryptocurrencies from being traded in Ecuador. Nevertheless, Ecuador has hopes to launch its own cryptocurrency in the near future.
China has prohibited all of its banks and other financial agencies from trading Bitcoin. However, this prohibition does not apply to citizens. As a result, they freely indulge in Bitcoin trades. In fact, China is one of the world’s largest existing markets for Bitcoin.
Even though Bitcoin is now approaching a decade of continuous operation since its launch, no country has yet devised an explicit system that either regulates, restricts, or bans it altogether. Because Bitcoin is a decentralized network that lends anonymity to its users, it can be quite challenging for governments to legitimize without unintentionally feeding into criminal activity. Bitcoin represents a grey area when it comes to financial ethics. Most countries are still very much in the learning stages of it all. Some have obviously decided that banning it altogether until a solution has been reached is the most suitable policy to adopt at present.
By Larry Newman