Sunday, March 26

What Russia Can Learn From Countries That Tried to Ban Cryptocurrencies | Bitcoin Portal

On Thursday, the Bank of Russia published a report calling for a total ban on cryptocurrencies.

While Russia banned cryptocurrency payments in 2020 and, in December, the central bank banned cryptocurrency investments, the latest proposal could go even further.

Citing environmental concerns, it can immediately suspend bitcoin (BTC) mining in the country, which provides more than 10% computing power to the Bitcoin network. It can also prohibit financial institutions from handling crypto asset transfers.

Russian citizens would not only be unable to buy goods and services with bitcoin, they would also be unable to buy bitcoin.

It’s hard to imagine a cryptocurrency ban being passed without the support of President Vladimir Putin, who has been in power for 22 years (he spent four years as prime minister because of term limits that have since been changed) – and who hesitates. to opine on crypto while analyzing the geopolitical ramifications.

Furthermore, many crypto advocates consider bitcoin and decentralized networks to be nearly immune from bans; it is difficult to police access to and use of assets that are essentially open source computer programs.

But other countries have already banned cryptocurrencies, either explicitly or implicitly.

according to one report from the US Library of Congress, published November 2021, nine countries explicitly banned cryptocurrencies: Algeria, Bangladesh, Egypt, Iraq, Morocco, Nepal, Qatar, Tunisia and, of course, China.

With the exception of China and Nepal, all these countries are mostly Muslim. There is an open debate about whether bitcoin is allowed under Islamic law, which prohibits charging interest or other financial practices deemed exploitative.

Although numerous leading clerics have declared bitcoin to be something “halal” (acceptable), others, such as the Indonesian Council of Ulema, regard it as “haram” (forbidden) as the currency does not have a physical form.

Even with bans in place, not all countries can fully enforce them.

In July 2021, according to the Cambridge Centre for Alternative Finance, the above nine countries control 0.19% of the bitcoin mining hash rate, that is, they contribute almost 1/5 of 1% of the total computing power of the network.

None of this, according to Cambridge estimates, comes from Chinese territory.

China, the most populous country in the world, has its own reasons for banning cryptocurrencies.

According to critics, the regime prioritizes financial oversight as a means of maintaining control over its citizens while decentralized technologies favor privacy and financial freedom.

China is currently testing a central bank digital currency (or CBDC), a virtual version of its yuan, to crack down, in part, on universal financial services provided by private companies Ant Group and Tencent.

In addition to these countries with explicit bans, another 42 (among them, Indonesia) have implicitly banned cryptocurrencies, according to the Law Library of Congress, despite laws and regulations related to the nascent technology being ever-changing.

This means that their governments do not allow financial institutions to have companies or crypto holders as clients or even prohibit cryptocurrency exchanges from operating, among other restrictions.

The list of countries includes Benin and Burkina Faso. Both are under the scope of the Central Bank of West African States (or BCEAO), which does not admit cryptocurrencies into the economic zone.

The same goes for Cameroon and Chad, which are members of the Central African Economic and Monetary Community (or CEMAC). CEMAC claims that because crypto assets are not regulated by it, they are illegal.

None of this prevented Chad and Burkina Faso from recording the fifth and sixth largest peer-to-peer bitcoin trading volumes on the African continent in September 2021, according to the website. Useful Tulips, although the number is lower compared to Binance’s daily volumes.

There are also crypto resistance points across South America, despite its welcome in countries like Argentina, Colombia, and Venezuela (Bolivia and Ecuador have skeptical opinions about cryptocurrencies).

Close to Russia, some former Soviet republics such as Georgia, Moldova, Tajikistan and Turkmenistan have implicitly banned crypto. Kazakhstan is also on that list.

One she June 2020 states that only cryptocurrencies backed by other assets (such as stablecoins) could be traded in Kazakhstan, despite formally recognizing bitcoin as a commodity in July and starting to leverage its low energy prices to attract miners.

But its power grid struggled to accommodate an influx of Chinese exiled bitcoin miners that made it the second most bitcoin mining country in the world in 2021.

Rising energy and fuel prices resulted in protests earlier in the month and an internet outage, taking mining operations offline.

The Central Asian country provides interesting lessons for Putin, keen to maintain his grip on power. But if he is looking at how bans are happening elsewhere, there will be no shortage of world leaders to ask.

*Translated and edited by Daniela Pereira do Nascimento with permission from