There is a huge increase in the popularity of Bitcoin and other cryptocurrencies in recent years. It all started over 10 years ago, after the introduction of BTC, which is a decentralized blockchain-based currency that provides people with the ability to keep their funds and make transactions without the need to involve third parties like banks and other financial institutions.
The main reason for such high popularity is related to the potential to make high profits by trading with bitcoin and other cryptocurrencies. This market is highly volatile, and traders see that as a great chance to make money. However, it is crucial to learn more about various factors that are affecting this market and how some changes could influence the movement of prices.
Besides standard trading, there are other methods to make a profit in this market, like mining or affiliate marketing. You can click here to find out more about affiliate marketing and how to get BTC from this model.
Furthermore, as we already mentioned, different factors could determine the values. One of those factors is related to current regulations that countries are introducing to control this market. For example, a lot of counties where you can trade with cryptocurrencies have regulations where you will need to pay taxes for the profit made by trading with BTC.
As an asset, the government will tax it as property, and you will have to pay around 25% taxes in most cases. On the other side, some countries are not allowing people to trade or use BTC in any way. Here are the main reasons why some countries are banning Bitcoin.
1. Lack of Trust
Some countries are not prepared for these changes, and they don’t trust that this new model of financial flows will provide them with any benefits. On the other side, the standard monetary system is active for a long time, and it would be challenging to implement new regulations and systems for digital currencies. Also, it is easier for them to keep using fiat currencies.
Also, the background is quite different when it comes to blockchain-based currencies. On the other side, the background of some fiat currencies can be gold, a strong economy, laws, and much more. Moreover, they can control the financial flows with the central bank, and issue new laws and regulations, along with taxes whenever needed. Also, they can monitor each individual and company if they suspect that they are involved in any form of criminal activity.
2. Taxes
As we already mentioned, a lot of countries have already issued new regulations where owners of e-wallets have to pay taxes on their profits made on this market. However, some countries are simply not developed enough to track this data, or they don’t trust that the citizens will send reports for their activities, which then requires increased control and tracking of financial activities of all people with bank accounts.
Moreover, you have probably heard already that a lot of people are accusing the BTC and other digital assets that they can be easily a part of criminal activities like funding terrorist organizations, trading on the black market, and more.
3. Volatility
Another reason can be related to the fact that the prices of assets on this market are changing so frequently, and countries cannot affect that in any way. This is another argument that some countries are using to forbid BTC. However, we can notice that a lot of them are working on the creation of national cryptocurrencies that won’t be decentralized. Besides that, there is an influence of banks who are against this new model of currency since it is directly affecting their business.
Some of them might be in fear that they would face financial issues if they let this system become widely used among the citizens. There is no way to control the financial flows and a lot of space for people to avoid paying taxes. On the other side, people could trade with cryptocurrencies even when they are banned in certain countries. You can use VPN, but you will need a bank account outside the country if you want to convert it into fiat currencies.
Which Countries Banned Bitcoin
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Turkey
This is one of the most recent cases where a country decided to ban transactions with BTC and other cryptocurrencies. They argue that they have a problem related to the lack of regulations towards this advanced financial system. However, we expect that they will introduce new laws soon so the people will be able to use their e-wallets again.
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Nigeria
The ban was introduced in February, and it represents even a stricter law than the one issued in 2017. The main reason is that they are in fear that criminal and terrorist organizations can use this market for funding and trading on the black market.
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Algeria
There is a law that states that money can only be a model that can be presented in physical form. Therefore, any model of virtual currency is banned. The penalties for breaking such a law are very strict here.
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Egypt
The officials in this country didn’t introduce any formal regulation related to banning cryptocurrencies, but their religious representative said that transactions with e-wallets are prohibited because they can threaten the economy and security of the country.
The Bottom Line
The biggest economy that is planning to ban Bitcoin is India. However, they already had a similar plan in the past, but then decided to prolong it, which can happen this time again. There is a large community of traders and miners in India, and that can influence the officials to give up on this plan.
When it comes to most other countries, we can notice some great improvements in recent years. The main challenge is still related to taxation and control, but they are creating advanced systems that might track people who are using online crypto exchanges to transfer money on their bank accounts. Also, the great improvement is that there is already a lot of crypto ATMs where you can easily convert funds from your e-wallet into fiat currencies.
