At least nine countries have placed absolute restrictions on the use of bitcoin. Various countries have chosen to apply stricter measures on money laundering with bitcoin.
Adopt Bitcoin (BTC) or restrict its use? This current situation appears to be the dilemma faced by many regulators globally. A study highlighted that countries that have totally or partially prohibited BTC has doubled in the last three years.
On the other hand, during the same period, actions favoring bitcoin were also seen, among them, the adoption as legal tender in El Salvador. The study listed countries worldwide that have regulatory policies regarding bitcoin and cryptocurrencies.
The research separates these countries from those nations that applied regulatory policies to allow its use and those that have prohibited it. The prohibitions got divided, in turn, into two categories: absolute and implicit.
The regulations get defined as the total ban on the use of cryptocurrencies. These prohibitions occur when some policies classify cryptocurrency use as a criminal act. On the other hand, various regulations prevent businesses and financial entities from using cryptocurrencies, but not their possession by citizens.
According to the study, at least nine countries in total, by November 2021, have decided to veto or prohibit all economic activity around the use of cryptocurrencies. China is the most notorious case in 2021.
Illegal Activities and Restrictions
By September of last year, the Central Bank of that nation classified as “illegal” any activity or trade-in in which bitcoin and cryptocurrencies are involved. Other countries with absolute restrictions on bitcoin are Algeria, Morocco, Tunisia, Egypt, Iraq, Nepal, Qatar, and Oman.
Since 2018, when the first report was published, only one country has added bitcoin to its list, in this case, China, from eight to nine countries that prohibit the use of cryptocurrencies. However, the states that applied prohibition policies have increased from 15 to 45.
In this same period, proposals got applied favoring bitcoin and cryptocurrencies, as in El Salvador. In that Central American country, in September 2021, the law to convert bitcoin as legal tender got approved.
Another example of this position is the advances in regulatory measures in Latin American countries, such as Paraguay, a nation developing policies favoring cryptocurrencies. This position is also the case of Costa Rica, a country that, according to some experts, has an optimal regulatory ecosystem for the adoption of bitcoin.
Anti-money Laundering Taxes and Regulations
The study in question also includes countries that, although they did not establish prohibitive policies on the use of cryptocurrencies, have placed regulations on the spectrum of taxes and bills against money laundering.
According to the study, at least 103 countries currently already have AML policies. These countries are often a target of criticism by advocates of cryptocurrencies as they can go against the privacy that some users seek when using bitcoin. Back in 2018, only 33 states applied this type of measure, meaning a growth of 300% in just three years.
In Europe, a tool named CipherTrace has been implemented to report the movements of cryptocurrencies between exchanges to identify who is the user who carries out the transaction.
By Jenson Rivas
