In the past several years, more and more countries have begun to ban crypto in order to protect their citizens from fraud and money laundering. China has been especially notorious for this when they initially prohibited financial institutions from engaging in any crypto transactions in May, then banned all domestic mining farms in June, and finally outlawed cryptocurrencies altogether in September 2018.
They were particularly concerned about the potential environmental impact of mining for crypto as well as people using digital currencies for fraud. However, it is interesting that among these 42 other restricted or prohibited countries is a push by China into developing a cryptocurrency of their own based on blockchain technology which they are trying to make more widely available to consumers. There are still many issues with this approach but one thing is certain: the world is transitioning into a digital society.
The number of countries that have banned crypto in some way or another has more than doubled since 2018 when the Law Library of Congress published their first report on these restrictions and prohibitions. There are now 122 countries worldwide explicitly restricting blockchain technology development in one way or another, although it’s notable that not all governments are taking this approach to crypto.
Many countries are attempting to regulate cryptocurrencies with the U.S., for example, making it more difficult to purchase cryptocurrency while still allowing mining farms to open up their businesses within the country legally. However, even if many other countries don’t fully prohibit blockchain technology, its still concerning that so many national governments question the value of virtual currencies especially when China was once considered a world leader in mining for crypto.
Like the Law Library of Congress’s report, the New York Times published an article this past week stating that China “wants to be a leader in blockchain,” and is currently hiring a senior adviser to assist its development of what they’re calling their own cryptocurrency. When it banned crypto last year, they did so in different phases: first they prohibited financial institutions from engaging in any crypto transactions in May; then in June they banned all domestic mining farms; and finally outlawed cryptocurrencies altogether in September 2018. The world’s second-largest economy had previously been a lead miner for cryptos and when these policies were put into place there was actually a major selloff which naturally corrected itself over time due to high demand.
There are still major issues with the current governmental approach to blockchain technology in China, but one thing is certain: the world is transitioning into a digital society and regulators and national governments must try to understand crypto better.
