Although 2021 was a good year for the cryptocurrency industry in terms of market performance, the number of jurisdictions banning crypto has more than doubled since 2018.
A report by the Library of Congress (LOC) details the nine jurisdictions that have now applied an absolute ban on crypto and 42 with an implicit ban. This is up from eight and 15, respectively, in 2018 when the report was first published.
The LOC is the research library for the United States Senate, acting as the national library for the country.
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/businesses dealing in cryptocurrencies.”
The nine new jurisdictions with an absolute ban are Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, Bangladesh and China. China’s crypto ban received the most attention in 2021.
The dramatic increase in jurisdictions banning or regulating cryptocurrency over the past three years is not showing signs of slowing as several governments are currently reviewing their options. Aside from the 51 jurisdictions with a crypto ban, 103 have applied Anti-Money Laundering and combatting the funding of terrorism (AML/CFT) laws, a three-fold increase from the 33 jurisdictions with such laws in place in 2018.
A Swedish financial watchdog and the Swedish Environmental Protection Agency called for a ban on proof-of-work (PoW) mining in November due to the power demands and environmental costs of keeping networks running. This was met with harsh criticism from Paris-based Melanion Capital, which called the claims against mining “completely misinformed.”
Sweden’s European Union neighbor across the Baltic Sea Estonia is set on implementing AML/CFT rules in February. These new rules are expected to change the definition of what a virtual asset service provider is and apply an implicit ban on decentralized finance and Bitcoin (BTC).
India’s government created a scare when lawmakers there considered a crypto ban last year. The outcome was not an outright ban but a push to regulate cryptocurrencies as crypto assets from the Securities and Exchange Board of India, which oversees the regulation of local crypto exchanges. An outright ban, however, is not out of the question.