Although it appears that every man and his dog has jumped on the cryptocurrency bandwagon in recent months, many people around the world are legally prohibited from participating.
Cryptocurrencies are, by definition, decentralized and unregulated by central banks, which means there are no international laws governing how they operate.
While this has been a major reason for people’s interest in cryptocurrencies, many governments around the world have remained skeptical, even going so far as to outright ban the currencies.
Where Are Cryptocurrencies Legal Tender?
As of now, only one country – El Salvador – has officially recognized Bitcoin as legal tender. Earlier this month, El Salvador’s Congress officially approved President Nayib Bukele’s proposal to accept bitcoin as an official form of payment.
Where Are Cryptocurrencies Banned?
Thailand is the most recent country to announce cryptocurrency bans, most notably those pertaining to everyone’s favorite internet trend: meme coins.
Last week, the Thailand Securities and Exchange Commission (SEC) imposed a new ban on coins such as Doge and Shiba Inu. It has directed that all meme coins, social and utility tokens, and NFTs be delisted from Thai exchanges within the next 30 days.
“The Securities and Exchange Commission (SEC) Board has approved the new rules that prohibit digital asset exchanges from providing services in relation to utility tokens and certain types of cryptocurrencies,” according to the SEC posting.
“The rules also specify that the exchanges set a requirement to be imposed in the event that digital tokens issued by their own exchange or related persons are listed on the exchange. In this regard, the token issuer who fails to comply with the white paper and relevant rules in substance could risk having such tokens delisted from the exchange. This new regulatory guideline aims to enhance protection of digital asset traders’ interest.”
According to the SEC, the ban is intended to protect citizens from tokens that have “no clear objective or substance,” which are frequently heavily influenced by social media, as seen with Elon Musk’s Twitter commentary.
While Doge and Cumrocket are obviously included, it is unclear whether more reputable currencies like Bitcoin and Ethereum, which have also been heavily influenced by social media trends, would be included as well.
According to the official SEC statement, the following crypto-related items are prohibited; however, the language is vague and may be open to interpretation:
- Meme token: having no clear objective or substance or underlying, and whose price running on social media trends;
- Fan token: tokenized by the fame of influencers;
- Non-fungible token (NFT): a digital creation to declare ownership or grant of right in an object or specific right. It is unique and not interchangeable with digital tokens of the same category and type at the equal amount;
- Digital tokens which are utilized in a blockchain transaction and issued by digital asset exchanges or related persons.
Gizmodo Australia has contacted the Thai government for clarification.
China has not only banned meme coins, but has effectively made cryptocurrency trading illegal.
The country recently prohibited banks and online payment platforms from trading, clearing, settling, or accepting cryptocurrencies, effectively prohibiting Chinese residents from participating.
“Recently, crypto currency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people’s property and disrupting the normal economic and financial order,” a joint statement from three Chinese industry bodies said, according to Reuters.
It is worth noting that the government has not prohibited individuals from owning cryptocurrencies, but has prohibited exchanges from operating.
Following the effective ban in May, a number of major cryptocurrencies plummeted, and many are still struggling to recover more than a month later.
Despite being the birthplace of one of cryptocurrency’s most prominent figures, Vitalik Buterin, Russia has been wary of cryptocurrency thus far.
It was actually prohibited until recently. Cryptocurrency, including meme coins, was only legalized in Russia in January 2021. This means you can trade, mine, and own cryptocurrency without fear of legal repercussions, as long as you don’t spend it on other goods and services in Russia.
However, the law still prohibits Russians from using cryptocurrency as a form of payment.
Ecuador banned Bitcoin in 2014, ahead of the launch of its own digital currency. However, this has had little effect on traders.
The bill, signed by then-President Rafael Correa as part of a larger monetary and financial law reform, made bitcoin illegal in the country.
According to a Panam Post article at the time, Bitcoin businesses were ordered to “shut down their operations immediately.”
“Those who defy the ban will face prosecution, and all bitcoins circulated and assets in bitcoin trades face confiscation.”
Bolivia banned any currency or coin that was not issued by the government in 2014, around the same time that Ecuador did.
“It is illegal to use any kind of currency that is not issued and controlled by a government or an authorised entity,” according to a translation of the central bank’s statement.
This ban includes Bitcoin, meme coins, and any other currency that is not issued by a government body, with Bolivian authorities citing the policy’s implementation as a means of protecting its own currency and citizens.
Bangladesh Bank, the country’s central bank, banned cryptocurrency, including Bitcoin, in December 2017, citing that it is not a legal currency in any other country (though El Salvador now considers it to be one).
“Transaction with this currency may cause a violation of the existing money laundering and terrorist financing regulations,” a news release on the Bangladesh Bank website reads.
While Iran has not officially banned cryptocurrency, it has banned crypto mining for at least four months in 2021 due to widespread blackouts caused by mining power usage.
This is significant because Iran accounts for up to 4.5 percent of all Bitcoin mining, resulting in more than 2GW of power being drained from the grid per day, according to the BBC.
The ban will be in effect until September 22, 2021.