Although 2021 was generally seen as a good year for the cryptocurrency industry in terms of market performance, the number of international jurisdictions banning crypto has more than doubled since 2018 with no sign of the trend easing in 2022.
According to an updated report by the American Library of Congress (LOC), nine countries have now applied an absolute ban on crypto and 42 an implicit ban. This is up from eight and 15, respectively, in 2018 when the report was first published.
Bans Have Two Shades of Meaning
In the context of the LOC report, an absolute ban means any “transactions with or holding cryptocurrency is a criminal act”, whereas an implicit ban prohibits cryptocurrency exchanges, banks and other financial institutions from “dealing in cryptocurrencies or offering services to individuals and/or businesses dealing in cryptocurrencies”.
The nine new jurisdictions with an absolute ban are Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, Bangladesh and China. Other than the 51 jurisdictions with a crypto ban already in place, 103 have applied Anti-Money Laundering (AML) and combatting the funding of terrorism (CFT) laws, more than three times the 33 jurisdictions with such laws in place three years ago.
Sweden, Estonia, Russia on the List; India Delays Execution
Estonia, Sweden’s EU neighbour across the Baltic Sea, is set to implement AML/CFT rules next month. As for Sweden itself, the Scandinavian nation’s Environmental Protection Agency called for a ban on proof-of-work (PoW) mining in November 2021 due to the power demands of keeping networks running.
The new rules are expected to change the definition of a virtual asset service provider and apply an implicit ban on decentralised finance (DeFi) and Bitcoin.
India’s government sent a shiver through the international crypto community when lawmakers there considered a total cryptocurrency ban last November. Although it did not eventuate, the Securities and Exchange Board of India – which oversees the regulation of local crypto exchanges – pushed to regulate cryptocurrencies as crypto assets. An outright ban, however, is still on the table.
Last month, Russia’s central bank moved to ban crypto investments and also also barred mutual funds from investing in digital currency.
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