Even after a decade long run, Bitcoin and Bitcoin mining is still outlawed in some countries. This is because of the divide between fiat currency proponents and crypto adopters on the best way to introduce Bitcoin, best practices, specific regulations.

No central bank in the world endorses, issues or regulates Bitcoin. This is what worries most developing countries coupled with the lack of control the government has over Bitcoin. The peer-to-peer payment system allows users to remain anonymous which is also a huge concern in case of malpractices, phishing scams and hacking.

While a Bitcoin paper wallet can sort some of these issues, most governments around the world are also gravely concerned about the volatility of Bitcoin and other cryptocurrencies.

For instance, if someone wanted to convert ADA to BTC, the exchange value could change while the transaction is underway.

Even with most problems resolved, there is still a major issue with Bitcoin and that is Bitcoin mining. Bitcoin mining uses a computational strategy called PoW or Proof-of-Work which means a miner has to verify the transaction in the blockchain faster than other miners. This drains a lot of energy, requires specific processors and risks making the decentralized blockchain a potential source for scam. Since miners are anonymous, there is no way to trace the scam either.

Let’s take a closer look at the major countries that do not allow Bitcoin or its mining -

China:

The People’s Bank of China banned ICOs on September 4, 2017. Later that same month, they ordered Bitcoin and cryptocurrency exchanges to shut down.

In 2019, China wants to take a drastic step and ban Bitcoin mining as well.

Russia:

You cannot use Bitcoin as payment for good and services in Russia. They attribute this to not having the legal structure to support crypto coins and it is unlikely that they will adopt cryptocurrency.

India:

RBI banned cryptocurrencies for making payments and are not allowing citizens to purchase cryptocurrency through their bank accounts. But, it may see a comeback soon.

Vietnam:

The government does not allow Bitcoin to be used as a currency but has not regulated it as an investment.

Countries that allow Bitcoin mining and Bitcoin -

Venezuela:

Venezuela has become the go-to example for anyone who wants to talk about crypto-adoption by an entire country to save its economy. However, Venezuela has not been able to implement a mass adoption and needs time to recover.

US:

The United States has been very positive about Bitcoin although there are some regulatory bodies that are working to prevent and reduce the use of Bitcoin for illegal transactions.

Canada:

Canada is also crypto-friendly and has allowed Bitcoin to be used for transactions and regulates them under the purview of AML or anti-money laundering laws.

Australia:

Australia is quite open to Bitcoin and treats it like any other currency allowing users to store, buy or mine it.

It may take a while before more countries get on board with Bitcoin and choose to stop banning it because they have no means to regulate it. The question that stumps most governments is how to ensure that this decentralized exchange is not used for funding criminal activities since all transactions are anonymous. Until this big question is answered, most countries are unlikely to allow Bitcoin or Bitcoin mining.

 

 

 

Published by Lena Burkut