With the rising demand for Bitcoin and other cryptocurrencies, the world is witnessing an entirely different aspect of making investments. Despite having such high value, many countries such as Saudi Arabia, Algeria, India, and many more have banned the use of cryptocurrencies. These cryptocurrencies have been considered a threat to the nations, the reason why they have been declared illegal. The governments of many such countries have stated that these types of currencies cannot be controlled or regulated by them due to their troublesome nature. Here, in this article, we will concentrate on the reasons which have led cryptocurrencies to be considered illegal in many countries.

What Is Cryptocurrency And How Does It Work?

In a generic sense, a cryptocurrency is a digital form of money or payment that can be used as an exchange medium for purchasing services and products. Along with strong cryptography, these currencies make use of an online ledger that keeps the online transactions secure. Various currencies or tokens have been introduced by several companies, which can be exchanged for the products or services that the company provides. Cryptocurrencies can be considered similar to such a concept. Blockchain is the technology that is the basis for the functioning of cryptocurrencies. If you want to know what is blockchain technology, I will clear all your doubts concerning it. Blockchain technology is something that is not controlled or regulated by any single bank. It records and manages various crypto transactions spread across many networks through a decentralized system.

How Many Cryptocurrencies Are Available and What Worth Are They?

Being traded publicly and legally, there are more than 6,700 different types of cryptocurrencies available in the market.  According to various market reports and studies, cryptocurrencies continue to snowball, increasing money through initial coin offerings. Your mind would get boggled after knowing what worth these cryptocurrencies are. According to a report this year, all the cryptocurrencies together valued more than $2.2 trillion. The value of Bitcoin, the most well-known currency itself, has a value of about $1.2 trillion.

Disadvantages Of Cryptocurrencies

Governments and associated bodies are feared of cryptocurrency since they consider it to be uncontrollable in financial aspects. There are various disadvantages related to cryptocurrencies. These digital currencies have made their way into the Dark Web Market and Silk Road as well while they were online. It is an alluring aspect for top-notch criminals and the ones who tend to indulge in money laundering and tax evasion. It procures a very convenient mode of transfer for cybercrime or terrorism. Investing in cryptocurrency is considered a huge risk because its values remain uncertain. One they might skyrocket, while on the other days, it might fall to zero. Hence, it is a huge risk to put your money in cryptocurrencies if you are short of funds already. This market also proves to be a considerable threat to our banking and financial institutions. The governments of many countries that have banned cryptocurrencies have also realized the same. The major issue is that not any single central bank is in control of these cryptocurrencies.

Why Cryptocurrencies Are Illegal In Many Countries?

The tense relationship between the government and cryptocurrencies in many countries has led to the outright ban on buying, owning, and trading cryptocurrencies. Let us have a look at some of the countries that have restricted the use of cryptocurrencies and declared them illegal and why:

1. India

The belief of the Indian government that cryptocurrencies are used widely and secretly for funding illegal activities has led them to pass a draft bill proposing the ban on private cryptocurrencies. However, they are yet to impose anti-crypto regulations. The government is, although not completely against the use of digital currencies and is considering introducing its very own central banking digital currency (CBDC).

2. Turkey

A ban on cryptocurrency payments has been recently imposed by the central bank of Turkey. For quite a while, the country had been strengthening its restrictions on cryptocurrencies, and hence it wasn’t of any surprise to the people residing there. The reason for their ban is the lack of control and regulations by a central banking system. It has also been considered to be a risk to investors not being able to revolver losses.

3. Bolivia

To safeguard the national currencies and protect the investors, in 2014, Bolivia’s central bank imposed a ban on decentralized cryptocurrencies. It was the first country in South America to impose such a ban at that time.

4. Algeria

The Government of Algeria imposed a law that stated cryptocurrencies to be a virtual form of payment that lacked physical support such as paper money, coins, and payments by check or credit card. Thus, they immediately banned the use of cryptocurrencies. People going against the law are taken to be punishable under financial laws.

Final Thoughts

I am sure now you understand why cryptocurrencies are illegal in many countries. Just as gambling activities like casinos and others have been banned, these cryptocurrencies also pose a threat that is unmanageable by the governments of many nations. The countries mentioned here are just some among the all who have outlawed the use of cryptocurrencies. The reasons as to why have been quite clearly elucidated here.

Author bio:

Sofia kelly is a passionate blogger. She loves to share her thoughts, ideas, and experiences with the world through blogging. Ani Johnson is associated with The Daily Notes, Content Rally, Online News Buzz, Real Wealth Business, Top Preference & Big Jar News.