As the cryptocurrency industry evolves into a more mature asset class, it is natural that regulation becomes a wider question. Many companies and governments are reluctant to enter the industry because of volatility and scepticism, so regulation seems like a natural next step for the industry, to bring peace of mind to the wider markets and therefore more confidence and investment in the industry. However, such regulation could also ironically negatively impact the growth of the space, especially if the imposed regulations affect digital assets.
China is surprisingly not the only country with an outright ban on cryptocurrency, as eight other jurisdictions have also applied an absolute ban on digital currencies. These jurisdictions are Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia and Bangladesh.
According to a report published by the Library of Congress (LOC), the number of jurisdictions imposing an absolute ban on cryptocurrencies jumped from eight in 2018 to nine now.
Furthermore, 42 other jurisdictions have imposed an implicit ban, a number that jumped from just 15 in 2018. These jurisdictions prohibit market players from ‘dealing in cryptocurrencies or offering services to individuals/businesses dealing in cryptocurrencies’.
LOC, which is the research library for the United States Senate, first published its report around cryptocurrency regulations in 2018. As per the latest one, the number of jurisdictions putting some kind of ban on crypto circulation and transactions has doubled in the last three years.
Meanwhile, developing cryptocurrency regulations has become a priority for many major jurisdictions as demand for cryptocurrencies has ballooned in the past few years. Nevertheless, it still remains a challenge for lawmakers to draft proper legislation involving decentralized technology.
However, the number of these crypto skeptic jurisdictions is likely to increase in the next few years. India, which is one of the largest markets for retail crypto demand, has already drafted a crypto bill that is expected to curb the local industry. Though the contents of the crypto bill have not been disclosed yet, it might also put a ban on cryptocurrencies. Russia is another major jurisdiction that is considering putting a ban on fresh crypto investments.
In contrast, European countries are attempting to curb the anonymity associated with cryptocurrencies, and many are pushing to implement strict anti-money laundering and counter-terror funding laws.