Let’s get one thing straight. Bitcoin doesn’t delight most governments, not usually for any insidious reason, but more for the fact that they don’t yet know what to do with it. Nor do a lot of people, for that matter, and many states have issued advisories to citizens against investing in the digital currency due to its volatility and current lack of regulation.
To their credit, most lawmakers worldwide have so far allowed Bitcoin to more or less take its own course while they figure it out – with the exception of countries, such as India, China, and Pakistan, who have placed partial bans and restrictions – but there are five governments who have legislated against crypto and moved to prohibit the trade and use of any digital currency.
Since El Banco Central de Bolivia decided in 2014 to ban all currency not issued or regulated by the government, the Bolivian authorities have shown that they mean business. In May 2017, they arrested 60 digital currency investors and released a statement with a gentle reminder (in all caps) that the trade and use of virtual currencies are illegal, proceeding to allege that the arrestees had been propagating a pyramid scheme. They really do not want people to use Bitcoin.
Amid ambitious plans from then president Rafael Correa to launch Ecuador’s Sistema de Dinero Electrónico (electronic money system) in early 2015, it was sort of logical for Congress to pass a ban on cryptocurrencies in July 2014. But this doesn’t mean it was a good idea: Bitcoin communities continued to thrive while the government was reluctant to be seen to punish them.
This can be seen as part anti-crypto sentiment and part opportunism from Ecuadorean lawmakers. Since high inflation and economic instability forced them in 2000 to abandon the historic Sucre and adopt USD in main, they have been keen to pivot towards regaining some control over their money.
The Sistema de Dinero Electrónico lasted less than four years and was deactivated in April. Experts cited a wary public, all too aware of the risk of putting any substantial amount of money into the hands of the Ecuadorean central bank — the causes of the national currency’s abolishment still fresh in their minds. They preferred private banks, which could at least be held accountable in worst case scenarios rather than hiding behind sovereign immunity. Perhaps the failure to make the digital Dinero work will in future make Ecuador more open to the idea of crypto.
Bangladesh Central Bank issued notices back in September 2014 regarding the use of Bitcoin and warned that it would be punished under the full force of the law. Some bank officials even indicated that those dealing in Bitcoin, or any other cryptocurrency, could face jail time of up 12 years under anti-money laundering laws.
The efficacy of this harsh regulation is questionable considering that they felt the need to issue a further notice late last year pleading for people to not use, trade, or talk about digital currencies like Bitcoin. This also draws attention to the fact that it has come to their attention that people are still doing it. With online communities brazenly persisting in the face of the harsh penalties, one questions how well their cautions are working.
The People’s National Assembly passed a motion to prohibit any use of digital currency in their Projet de Loi de Finances (PLF), essentially Algeria’s 2018 Finance Bill, declaring that Bitcoin is commonly used for drug trafficking, tax evasion, and money laundering. Algerian news site Maghreb Emergent reports that: “Any violation of this provision is punished in accordance with the laws and regulations in force.”
The authorities in Macedonia claim that the use of Bitcoin violates their laws regarding foreign exchange and say those dealing in the currency could be imprisoned for up to five years and face fines of 10,000 euros. Fears surrounding the potential use of the currency for money laundering seem to be pre-eminent here.
Callum reports on developments in the cryptocurrency world and offers a take on the future of the blockchain. Can often be found with a cup of tea reading an altcoin whitepaper.