Crypto is banned in China and other countries, but why?

From the time of ancient civilization, there have always been people that were looking for ways to make their lives easier. The financial world has evolved over many years and it's still evolving today with new technologies like cryptocurrencies or blockchain technology.
Cryptocurrencies are decentralized, irreversible payments that offer anonymity and allow for transactions without the need for third-party services (DeFi). Those facts suggest that cryptocurrency is a revolution that people want and should be used in any financial system.
Several nations have already embraced cryptocurrencies. One of them is El Salvador, which has declared Bitcoin as a legal currency. Argentina, on the other hand, is open to adopting Bitcoin.
However, many countries have chosen to block cryptocurrency exchanges from their citizens. Countries such as Indonesia, Turkey, Egypt, and Uzbekistan fall into the category of "blocked" countries. Some of them recognize cryptocurrencies as legal, but they prohibit them from being treated as payment tools. Other countries have completely banned cryptocurrencies.
The Chinese government has recently announced a ban on all crypto mining, trading, and exchanges. The People's Bank of China declared that Bitcoin has no value. Although it's not the first time China has made such claims, this could be a signal for other countries to follow.
Why do some countries refuse to incorporate cryptocurrency into their monetary system? Why are they so keen on banning them? Which countries will follow China's lead and prohibit cryptocurrencies?

We have asked 467 Experty community members questions related to "Crypto is banned in China and other countries, but why?". We have received many valuable replies, the best ones (based on Experty community feedback) you can read below.

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UX Researcher and Designer

What do you think is the reason for crypto being banned in countries?

El Salvador took a great leap of faith for humanity by making bitcoin legal tender, it is still too early to conclude the decision as correct, but many see this action with positive eyes no matter how good or bad things could turn out. In the case of nations that are enthusiastic about banning bitcoin, there are different variables such as: 1. The government has an ongoing project of CBDCs. 2. Sell the FUD to buy the DIP themselves. 3. Loss of control over the masses. 4. Staggering in domestic monetary policies. 5. Stubbornness. And a handful more adjectives for the 1% of old minds who don't understand anything new. Anyway, they can ban bitcion here and there but the metaverse is here and it's here to stay. I live in a country where any form of currency not issued by the local central bank is supposed to be prohibited. Still, they are promoting sandboxes with neobanks around here and attracting international exchanges to open the doors to investment over there. The strategy with bitcion for me is now clearer. If it dips, I buy. If it keeps dipping, I keep buying, and if it dips more I bought more.

IT

What do you think is the reason for crypto being banned in countries?

The first is the growing number of crypto scams – they grew 40% in 2020 and are forecast to increase by 75% this year – and its links to illicit finance. In theory, restricting the mining and use of cryptocurrency should eliminate this problem. Practically speaking, however, bans do little to dissuade criminals. Scammers will scam, and outlawing cryptocurrencies merely provides “an illegal onramp” for these digital assets in a given jurisdiction The second reason for banning cryptocurrency, is the threat it poses to government-directed monetary policy. While bitcoin or Ethereum may provide citizens with a useful hedge against a plunging national currency, cryptocurrencies undermine central banks’ ability to use monetary policy to fix the problem underlying the currency depreciation, and diminish their influence over investment, spending, or inflation within their jurisdictions.

Which countries in your opinion will follow China's lead and prohibit cryptocurrencies?

Russia While cryptocurrency isn’t outlawed in Russia, there is an ongoing conflict being waged against its use. Russia passed its first laws to regulate cryptos in July 2020, which for the first time designated cryptocurrency as property liable to taxation. The law, which came into force in January this year, also bans Russian civil servants from owning any crypto assets. Russian President Vladimir Putin has repeatedly linked cryptocurrency with criminal activity, calling for closer attention to cross-border crypto transactions in particular. In July, the prosecutor general announced new proposed legislation which would allow police to confiscate cryptos deemed to be illegally obtained citing its use in bribery. Vietnam The State Bank of Vietnam has declared that the issuance, supply, and use of Bitcoin and other cryptos are illegal as a means of payment and are subject to punishment of fines ranging from 150 million VND (€5,600) to 200 million VND (€7,445). However, the government doesn't ban Bitcoin trading or holding them as assets.

What do you think will happen to the crypto market in general after more countries start banning cryptocurrencies?

I think the convenience of cryptocurrencies cannot be ruled out. It is possible that the cryptocurrency will depreciate from its current value. But will then return the value, and possibly increment further. Because above all, there are a lot of big investors and there are people who still believe in the use and recognition of cryptocurrencies.

Design

Which countries in your opinion will follow China's lead and prohibit cryptocurrencies?

i think saudi arabia, or maybe india that has so much crypto adoption, apart from that maybe more countries that will follow china's footsteps to ban crypto think that china is a big country that has a big level of trade,

What do you think will happen to the crypto market in general after more countries start banning cryptocurrencies?

may collapse slowly considering the panic of a news, which causes everyone to panic and sell their assets so as not to suffer huge losses as a result of a ban in a country

Global Strategist

What do you think is the reason for crypto being banned in countries?

There are philosophical reasons for governments to oppose to the adoption of cryptocurrencies. Governments derive great economic and social control through their centralized control of fiat currency and the banking system. The Chinese government, being a communist government, will be particularly opposed to any technology that threatens their existing control of their citizens and economy.

Which countries in your opinion will follow China's lead and prohibit cryptocurrencies?

There seems to be a couple of trends in countries that have banned crypto: First - an authoritarian government (expressed through various political ideals). Second - Islamic countries with a large population tend to ban cryptocurrency. Third - Governments that believe Cryptocurrency is a destabilizing force in their economic control. As such: Yemen, Niger, and Turkey are all candidates. While they may not be directly following China in religious or political ideals - the values of decentralized finance are in direct opposition to their own value system. In addition - due to political ties, and an already strained relationship with cryptocurrency, it would not be a surprise if Russia followed China's ban.

What do you think will happen to the crypto market in general after more countries start banning cryptocurrencies?

Short term pullback - there are people trend trading, who will rightly see this as a market reduction. The market will shrink dramatically in those countries, although, it will not disappear altogether. The people who are willing to flaunt the government regulations are in the minority. Given that these participants are invested in cryptocurrencies because of a deeply held value set - you should expect to see more long term holders in this group. This creates a bullish long term outlook, since they are still able to interact with the global cryptocurrency community. Cryptocurrencies directly challenge the centralized economic control of fiat currencies. There will always be a market seeking this type of financial freedom. As long as there is that community, cryptocurrencies have a bright future.

Product Manager

What do you think is the reason for crypto being banned in countries?

This is quite obvious as the state (central banks) is losing its control over finance policy. State is in its definition authoritarian and egalitarian. The crypto is potential threat to the state authority. The citizens will still find the way.

Which countries in your opinion will follow China's lead and prohibit cryptocurrencies?

The totalitarian one such as Turkey, Venezuela and others. The more state has control over the country the higher probability for the ban. The more open and liberal countries the higher probability that crypto will flurish.

What do you think will happen to the crypto market in general after more countries start banning cryptocurrencies?

The crypto will be untouched as there will be still some countries supporting it. As the crypto does not know borders it can be traded anywhere and no ban can stop it.

Photographer

What do you think is the reason for crypto being banned in countries?

Main reason is banks and government don't have any control over it and it scares them. Crypto currencies being decentralized there is no need of middle man like banks. It has been found that crypto currencies are also used in criminal dealing as these transactions are anonymous/hard to track. There is also tax evasion issue. It is already hard for government to find those who evade tax and crypto has made it even harder. In countries like India only 3 to 4% of population pay taxes.

Which countries in your opinion will follow China's lead and prohibit cryptocurrencies?

Turkey is already on track to ban crypto. Algeria, Bolivia, Pakistan, Bangladesh, Qatar, Saudi Arabia, Macedonia are some of the countries which have or in process of completely ban crypto currencies.

What do you think will happen to the crypto market in general after more countries start banning cryptocurrencies?

It has always proven fact that whatever China bans, that things flourish and prosper. For example Facebook, WhatsApp, Google, Amazon, Twitter....you get the drift. Since total ban on mining in China...Bitcoin mining hash rate has already back to all time high. Miners simple moved to more welcoming countries. I do see crypto market to grow and out perform any given financial market in the world.

Psychologist

What do you think is the reason for crypto being banned in countries?

Turkey is one of the countries that banned cryptocurrency usage in daily life. You can not buy or sell any product in exchange. Turkey's Central Bank sees dangers in the new practice, and on April 16 banned the use of cryptocurrencies and crypto-assets for purchases from April 30, citing “irreparable” damage and transaction risks. As you know Turkey's inflation is rising every day. This is a sign that taxes have a huge place in the economy, which helps it stand if you would use that term. Blockchain and cryptocurrency are something most of the countries trying to adjust with and some of them will have a hard time doing that. What I think is that the countries with a free and strong economy might adapt easier. And of course, we should consider the politics and cultural assets in this field. Look at the number of trading of cryptocurrency in Turkey. You will see that Turkey is one of the top counties. Why? People are trading small amounts but almost 1 out of 5 people trades and many of them lose more than they could afford. They know nothing about the blockchain system. They have never read the whitepaper of the projects they are investing. This is about mindset, this is about lifestyle. This could be over with the correct education provided. People need to know what is blockchain, how to use it, what are the risks, and more. With the right steps taken nothing is impossible. No one can compete with this new system. So it is either you are in or out and I know one day everyone will be on board.

Which countries in your opinion will follow China's lead and prohibit cryptocurrencies?

In Turkey, inflation is around 20% announced just a few days ago. There are taxes added to everything almost every month so I think it would be Turkey since inflation makes them cover their steps economically.

What do you think will happen to the crypto market in general after more countries start banning cryptocurrencies?

More countries will ban cryptocurrencies and after some time they will see that it is unstoppable they will come to a conclusion that they are better with it.

Community manager

What do you think is the reason for crypto being banned in countries?

Bitcoin and other Crypto-Currencies are considered outlaws in some of the countries as the Government and the financial institutions are not able to control or regulate them. And Cryptocurrency Market attracts Criminals and people interested in tax evasion and money laundering.

Which countries in your opinion will follow China's lead and prohibit cryptocurrencies?

Turkey, bolivia,ecuador,columbia,vietnam,russia,saudi arabia, mongolia, libya, sudan, iran, iraq government and its state bank maintain that bitcoin is not a legitimate payment method, though it is not regulated as an investment.

What do you think will happen to the crypto market in general after more countries start banning cryptocurrencies?

Its keep straight, just as usual, there are some countries that prohibit it but on the other hand there are also many countries that legalize it. so I think the development of the crypto market will be the same, maybe it will also increase

Economist

What do you think is the reason for crypto being banned in countries?

They want a system that they can manage. This is because they can benefit and have power only when they are under their own control. I think that being incorporated into the system itself gives them power in their hands.

Which countries in your opinion will follow China's lead and prohibit cryptocurrencies?

I think Korea will follow China's policy after China. Korea's current president is implementing a policy that is as good as a socialist believer. Also, Korea's current major political faction wants all people to be equally poor.

What do you think will happen to the crypto market in general after more countries start banning cryptocurrencies?

China's ban on cryptocurrency does not seem to have a significant impact. Ultimately, I think China will open the market again if it is judged to be controllable through CBDC.

Bussiness owner

What do you think is the reason for crypto being banned in countries?

This may be because they don't have any rules or regulations that support cryptocurrencies. And perhaps look at the volatility of the crypto market that outweighs fiat money. and their people do not have enough knowledge and understanding Especially China. Their people love to change and corrupt digital currency.

Which countries in your opinion will follow China's lead and prohibit cryptocurrencies?

I think when cryptocurrencies are popular all over the world. Until then, China will have to accept. and adapting to adapt to changes with the United States and the European Union is leading

What do you think will happen to the crypto market in general after more countries start banning cryptocurrencies?

I don't think any country can ban the digital currency market. If his people are forbidden They will trade on the black market. will create more problems for their country

Summary

Opinions about Bitcoin and its legalization are divided. The main question is which countries will follow China and ban cryptocurrencies. Countries such as Albania, Colombia, Egypt, Iran, and Iraq are the nations that have limited trust in Bitcoin and probably will prohibit or limit crypto next.
To fully understand why cryptocurrencies are such a controversial topic in different countries, we need to focus on their politic. According to Experty members’ opinions, there are many reasons why China banned cryptocurrency transactions. Their government is afraid of becoming powerless inside the monetary system. With the existence of decentralized infrastructures, those in power seek to put them down. Besides, the reason may be the fear around crypto and the lack of understanding of how blockchain technology and closely related projects work.
There is also an issue about the market reaction. Might be a temporary pullback, but mostly, predictions are promising. Whatever China prohibits, flourishes and grows all over the world, including Facebook, WhatsApp, Google, Amazon, Twitter.

This is not a financial advice. Please do your own research and consider the risks of trading cryptocurrencies.