Can a country actually ban Bitcoin?
updated on:26 Nov 2020
Since the earliest days of Bitcoin, there have been concerns that it's only a matter of time until the cryptocurrency is banned by governments around the world.
For one thing, Bitcoin is often cited as being a threat to traditional monetary systems, with the potential to undermine the control of central banks over the money supply. There are also (mostly unfounded) concerns that Bitcoin facilitates drug trafficking and money laundering, due to its pseudo-anonymous nature.
But whether or not it's actually possible for governments to ban Bitcoin can vary from region to region.
Bitcoin has already been banned in some countries
The question of whether Bitcoin can be banned has been answered to an extent, since the cryptocurrency has already been officially banned in several countries.
Currently, just a handful of countries place an outright blanket ban on Bitcoin—and prohibit interacting with, owning, or using the cryptocurrency in any shape or form. These countries include Algeria, Ecuador, Egypt, Nepal, and Pakistan.
Several others, including Saudi Arabia and Taiwan, have also introduced a partial ban on the cryptocurrency, typically blocking financial institutions from dealing in the cryptocurrency or facilitating Bitcoin transactions.
So far, the vast majority of countries that have either restricted the use of Bitcoin, or banned it entirely, are relatively low down on The Economist's Democracy Index, and many are considered flawed democracies or worse.
US President Donald Trump has taken a negative stance on cryptocurrencies, last year stating that he is "not a fan" of them, and describing their value as "based on thin air."
However, the risk of a blanket ban on Bitcoin in the US is highly unlikely, given the efforts of various cryptocurrency lobbying groups and a recent positive shift in sentiment among policymakers.
Nevertheless, by imposing harsh regulatory requirements on the on-ramps and off-ramps to the Bitcoin ecosystem, a country could make it very difficult to obtain and use the cryptocurrency, without officially banning it.
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