In which countries is cryptocurrency banned?

In recent years, cryptocurrencies have gained significant popularity as an investment tool and means of payment. However, the regulation of cryptocurrencies varies significantly in different countries: from full legalization to a complete ban. A complete ban on cryptocurrencies can be due to a number of reasons, including financial stability, control over money laundering and terrorist financing, and the desire to protect the national currency.

By 2025, cryptocurrency remains illegal in several countries, where any activity related to it is explicitly prohibited. Among these countries are China, Bangladesh, Bolivia, and Egypt, where all cryptocurrency transactions are banned, including trading and mining within the country. Complete bans on cryptocurrency are also in place in Algeria and Nepal. Such bans are often driven by concerns about financial security, money laundering risks, and potential destabilization of the national economy. Each country has a unique regulatory approach that reflects its economic policies and legal framework.

Why is cryptocurrency banned in China?

Cryptocurrencies, which are digital or virtual currencies that use cryptography for security, have become a significant phenomenon in the modern financial system. Despite their popularity in many countries, cryptocurrencies have been completely banned in China. The Chinese government’s decision was driven by several compelling reasons that affect both domestic economic strategies and national interests in the area of financial regulation and national security.

Financial stability and currency control

One of the main reasons China has banned cryptocurrencies is to maintain control over its financial system. China has a strict monetary policy, and controlling capital investment and capital outflows is a key aspect of its economic strategy. Cryptocurrencies, especially Bitcoin, are a decentralized form of money that can be used to bypass government controls on capital transfers.

Combating money laundering and terrorist financing

Cryptocurrencies, due to their anonymity and cross-border nature, pose significant risks in the area of money laundering and terrorist financing. The Chinese government is trying to prevent cryptocurrencies from being used as a tool for financial crimes, as tracking such transactions is significantly more difficult due to the lack of centralized control.

Consumer protection

Investing in cryptocurrencies involves high risks, including potential financial losses due to market volatility, fraud, and technological failures. Chinese government policy is aimed at protecting the financial interests and security of citizens, which necessitates regulation of the cryptocurrency market.

Technological control and development of national digital currency

China is actively working on creating and implementing its own state-run digital currency, the digital yuan. This development highlights the country’s drive for innovation in digital technology and finance, but the existence of unregulated cryptocurrencies could undermine this process.

The decision to ban cryptocurrencies in China was driven by multiple factors, including the desire for financial stability, the need to control financial flows, consumer protection, and the prevention of financial crimes. It also reflects the government’s desire to control technological development and ensure national security in a rapidly changing digital landscape.

Why is cryptocurrency banned in Bangladesh?

Cryptocurrencies were outlawed in Bangladesh in 2014, causing significant controversy both domestically and internationally. Bangladesh’s policy on cryptocurrencies reflects a general concern about their potential risks and the lack of controls that characterize traditional financial systems. The ban was driven by several key reasons that are important to understand in the context of the country’s economic and social realities.

Financial security and stability

Bangladesh has a relatively unstable economy with a large population living below the poverty line. The country’s authorities are concerned that cryptocurrencies could exacerbate economic inequality because they can provide access to financial transactions without going through the traditional banking system, leaving the poor vulnerable to financial fraud and economic fluctuations associated with volatile cryptocurrencies.

Regulation and control

Cryptocurrencies are inherently decentralized and unregulated assets, making it difficult for governments to oversee and control them. Bangladesh strives to maintain strict government control over the financial sector to avoid money laundering and other financial crimes. The lack of controls over cryptocurrencies is perceived as a serious threat to national financial security.

Consumer protection

The Bangladeshi government has expressed concerns about the risks associated with the use of cryptocurrencies, such as fraud, theft, and loss of funds due to hacking or technical failures. These factors pose a high degree of risk to users who are often unaware of the potential dangers. The ban on cryptocurrencies was introduced as a measure to protect the financial interests of citizens and minimize potential losses.

International obligations and standards

Bangladesh also seeks to comply with international financial standards and obligations, especially in the context of combating money laundering and terrorist financing. Participation in international financial systems requires the country to adhere to certain rules and standards, which may be undermined by the unstable and unregulated nature of cryptocurrencies.

The ban on cryptocurrencies in Bangladesh is a reflection of the state’s overall policy on financial security and stability. Despite the potential benefits that decentralized digital currencies may bring, the government has focused on protecting its citizens, the financial system, and complying with international obligations. This decision highlights the country’s cautious approach to innovation and technological advancement in the financial sector.

Why is cryptocurrency banned in Egypt?

In Egypt, cryptocurrencies have been subject to strict regulatory restrictions, resulting in them being outlawed. This decision by the Egyptian authorities was due to a complex of social, economic and religious factors that require careful analysis to understand the country's approach to regulating digital currencies.

Religious grounds for the ban

One of the unique aspects of the cryptocurrency situation in Egypt is the influence of religious teachings. Egypt’s Islamic scholarly authority, Dar al-Ifta, has declared cryptocurrencies gharam (forbidden in Islam). This decision was made on the grounds that cryptocurrencies can facilitate financial speculation, gambling, and have a high level of risk and uncertainty, which is contrary to Islamic financial principles.

Economic stability and currency control

Egypt faces economic challenges, including high inflation and currency instability. The government is trying to maintain the stability of the Egyptian pound and control the foreign exchange market. Cryptocurrencies, the government believes, could undermine this stability through speculative transactions and the ability to bypass traditional banking channels for international transfers.

Consumer protection

Egyptian regulators have also expressed concerns about the risks to consumers associated with the use of cryptocurrencies. These risks include potential fraud, loss of funds, and technological and operational instability of cryptocurrency platforms. The lack of a robust regulatory and legal framework for cryptocurrencies in the country adds to these concerns.

Anti-money laundering

Egypt is actively fighting financial crimes, including money laundering and terrorist financing. The unregulated nature of cryptocurrencies provides potential channels for illegal financial transactions. The authorities believe that without strict checks and controls, cryptocurrencies can become a tool for financial crimes in the country.

The ban on cryptocurrencies in Egypt is driven by a number of factors, including religious objections, the need to maintain economic stability, consumer protection, and the prevention of financial crimes. These measures reflect the Egyptian government’s desire to ensure financial security, protect national interests, and uphold religious norms amid growing global interest in digital currencies.

The ban on cryptocurrencies in some countries is a response by governments to the emerging risks and challenges they pose to national security and the financial system. Each country that decides to introduce such measures seeks to protect its economic interests and ensure law and order, but such decisions also limit opportunities for innovation and the development of new technologies. At the same time, cryptocurrencies continue to gain popularity in other parts of the world, where crypto regulation is more lenient (for example Czech Republic), which emphasizes the complexity and diversity of approaches to their legal regulation.