This financial model, created by Satoshi Nakamoto, was to protect the average person from harsh economic situations. For example, the Global financial crisis of 2008. Cryptocurrencies were created to be peer-to-peer, therefore, they became a threat to power. Its disruptive nature was because they invalidated central intermediaries.
Satoshi created the Bitcoin blockchain in 2009. This was at the peak of the global financial crisis. A period when people’s confidence in financial central authorities was on the low. Consequently, many people embraced crypto as a fair system. A financial system away from corporate control and mismanagement.
Many of its earliest supporters were arrested and charged with money laundering. This move from people in power was to stop the popularity, but that didn’t deter people as its popularity grew. Crypto has been dubbed by many governments as having anarchist tendencies. While some have embraced crypto because of its potentials, others are considering the Blockchain model to create their own Cryptos.
This article will be looking at a few governments who against-all-odds decided to embrace cryptocurrencies. And those who out of fear of losing control banned its use.
El Salvador is the first country to make Bitcoin a legal tender and is currently the only country with a BTC holding. On Sep. 7, 2021, El Salvador acquired 400 BTC worth around $21 million as of the time of purchase. On Sep. 21, El Salvador’s president, Nayib Bukele, announced that his country just bought the dip.
The move increased their Bitcoin holding to 700 Bitcoin, worth around $29 million. Salvadorans are allowed to buy properties and even pay tax using BTC. The country also has a tax waiver for transitions involving cryptocurrencies. Furthermore, the government encouraged citizens to download the Chivo Wallet, a government-backed crypto wallet with an offering of $30 worth of BTC as a signup bonus.
United States of America
The United States of America is the most crypto-friendly country. Even though the government favours strict regulatory policies. Most of the top crypto institutional investors are based in the US. The US does not recognize any crypto as a legal tender but sees them as a commodity. Cryptocurrencies are commodities according to The US Internal Revenue Service (IRS). The Commodity Futures Trading Commission (CFTC) also considers cryptocurrencies as commodities. It is only the US Securities and Exchange Commission (SEC) that sees crypto as a security.
However, the Biden Administration is working towards creating a united regulatory document that will balance the differences in opinions. In effect, the US supports crypto activities as long as it has approval from the US SEC. Coinbase, one of the biggest crypto exchanges in the industry, chose the US as its headquarters.
The government of the United Kingdom is crypto-friendly. However, they consider cryptocurrency as property, and such is taxable. Although there are no strict laws governing crypto activities, crypto in the UK is not considered a legal tender. Some crypto businesses can also trade unregulated in the UK as currently the regulations laid out by the Financial Conduct Authority don’t encompass all crypto business activity.
3 Countries That Aren’t Embracing Cryptocurrencies
Many countries are not embracing Bitcoin because of relative reasons. However, there are those who once embraced it and then changed their minds afterward. This part will be exploring countries where the Crypto use-case was important to the entire ecosystem. These countries were also picked because of landmass, impact, and the domino effect.
Nigerians were the second-largest users of crypto outside the US in 2020. However, it was banned after the END-SARS protest that nearly divided the country. Nigeria’s ban on crypto stems from a lot of issues. The country’s currency, Naira, is failing. The government’s inability to come up with a working regulatory framework.
To inflame the situation, the government also considered crypto as a money-laundering scheme. Consequently, they declared Nigeria a no crypto country. And all crypto businesses were ordered to leave.
In July, the Chinese government clamped down on every crypto-miner in the country. An action that led to another series of depressing impacts on BTC. The impact of the Chinese crackdown was one of the reasons the market lost more than 50% percent of its value in July. It sent BTC plummeting to a $30,000 all-time low.
The Chinese crackdown affected the market so much that many feared it was the end. One of the reasons the clampdown affected the market was that Chinese Miners controlled more than 50% of BTC’s mining hash power. Currently, China is a no crypto zone, courtesy of the government.
Turkey is another country with a lot of crypto red tape. The central bank of Turkey in April banned the use of crypto for whatever financial purpose. Their president also heightened the effect of the ban by issuing a presidential decree criminalizing the use.
The bottom line. Cryptocurrency will be banned in some countries and would be legal in others. But with different countries venturing into CBDC the future of crypto remains divided.