Cryptocurrencies gained extraordinary popularity in 2021. Yet a number of countries have decided to ban or heavily regulate these volatile assets for various reasons.

In 2021, cryptocurrencies took the economic markets by storm. While some countries have not specifically defined a cryptocurrency strategy, others have decided to ban these assets altogether. The most important economic actor to ban these digital currencies is obviously China. In May 2021, the Asian country decided to ban Chinese financial institutions (mainly banks) from providing cryptocurrency-related services. And China is not alone. According to the Law Library of Congress report from November 2021, 51 countries have made the decision to ban cryptocurrencies, either implicitly or absolutely.

In addition to China, eight other countries have absolute bans on these digital currencies. Algeria, Bangladesh, Egypt, Iraq, Morocco, Nepal, Qatar, and Tunisia have all chosen to unilaterally ban exchanges and services surrounding cryptocurrencies. The majority of the 41 other countries that have promulgated regulations regarding digital assets are in Africa or the Arabian Peninsula. More surprisingly, according to the report, the only country located in Western Europe with implicit bans affecting cryptocurrencies is Moldova. These regulations prohibit banks, lenders, and any other financial institution from offering services involving cryptocurrencies to their customers.

A pivotal year for regulation

Recently India and Iran announced their intention to create new legislation to ban cryptocurrencies. In its report, the Law Library of Congress lists 103 countries that subject digital currencies to tax laws, as well as laws governing money laundering and terrorist financing. All countries in the European Union have these regulations except Bulgaria.

It looks like 2022 will be a busy year for lawmakers around the world. The need to regulate these digital currencies is growing, and a multitude of countries have taken action in this area this year. The creation of state-backed digital currencies should spur still-too-lenient leaders to adopt new measures, even as the cryptocurrency world remains opaque and difficult to rule.

Axel Barre