March 1, 2022

Can governments ban cryptocurrency?

[The Sun]

MILLIONS of investors around the world trade cryptocurrency – and some may be wondering if they will be banned from doing so.

The main critique of cryptocurrencies is the heavy volatility they are subject to.

Some countries have fully banned cryptocurrencies

In other words, the digital assets could gain or plunge rapidly with little or no notice.

With inflation spooking investors, two of the largest cryptocurrencies Bitcoin and Ethereum are down 8% and 21% year-to-date.

Countries that have banned crypto

Meanwhile, some countries have already fully banned cryptocurrencies. They are as follows:

  • Egypt
  • Iraq
  • Qatar
  • Oman
  • Morocco
  • Algeria
  • Tunisia
  • Bangladesh
  • China

Moreover, India and Russia have proposed to fully ban cryptocurrencies.

In 2018, India actually banned crypto transactions – but it was struck down by the Supreme court in March 2020.

Why ban cryptocurrencies?

Some might think the reason cryptocurrencies are banned in some countries overseas is over volatility – but that’s not necessarily true.

A big issue is the scams users are susceptible to.

China’s government, for instance, claimed it was concerned that people were using digital assets for fraud and laundering.

It has also expressed concerns over the impact on the environment, as well as the potential of the destabilization of the country’s financial system.

Russia, India, and other countries have also feared about cryptocurrencies affecting their financial systems.

What’s going on in the US? 

The US, on the other hand, is not one of the countries that are looking to fully ban cryptocurrencies – at least not yet. 

In fact, Federal Reserve chairman Jerome Powell said in the fall that there are no intentions of banning cryptocurrencies including Bitcoin.

Meanwhile, reports in the media suggest that President Joe Biden is planning to issue an executive order that will advise government agencies to take a look at cryptocurrencies and currencies from the central bank.

Currently, it’s unclear what exactly would come out of that.

The order is reportedly delayed because of the war between Russia and Ukraine.

The only crypto change that is confirmed is how transactions will be reported in the future.

Starting in January 2023, brokers will need to report all transactions involving digital assets to the Internal Revenue Service (IRS) on 1099-B forms. 

In other words, the IRS is going to keep close tabs on you if you are buying a selling cryptocurrency.

So many could be in for a surprise tax bill in the future.

Despite no ban US on the horizon, scammers stole $14billion worth of cryptocurrency in 2021, reports CNBC.   

In particular, there was a big scam behind the cryptocurrency Squid game, which reportedly took an estimated $3.38million from victims.

Another scam recently involved a user losing $300,000 worth of Bitcoin after thinking she’d found love on a dating app.

Moreover, AMC fans can pay for their movie tickets with digital assets including Bitcoin.

By Anthony Russo

Leave a Reply