Governments and Banks around the world are trying to limit crypto growth.
The first digital currency (Bitcoin) was created to provide people with an alternative payment method online that is secure and ensure the privacy of the user through the use of decentralized banking ledger in a blockchin. This is possible without the central control of banks or governments that you entrust to keep your money secure for a fee. In theory the only fee you pay when using cryptocurrency is when you send funds to someone. While this sound preferable to traditional way of banking, there are several challenges stopping cryptocurrency becoming a global accepted and that affect the price and the growth of the cryptocurrency.
## The financial rule imposed by governments.
At least every country in the world have financial rules to run governments and keep the economy of the country balance and these rules can be undermined by use of cryptocurrency. As mentioned above, digital currency uses decentralized ledger called blockchin to store information about transaction, no single individual or organization have control over blockchin and that make it difficult for government to collect taxpayer financial recodes. Unlike traditional banking where a taxpayer’s financial recodes are available to governments through the rules and regulations put in place by the government itself in order to collect information about taxpayer. Cryptocurrency banking system provide some kind of privacy to the user, which can used to easily avoid paying tax. For this reason and others, many country are regulating or banning the use of cryptocurrency which in turn affect the value of all cryptocurrencies.
Other governments use rules and restriction to limit people from using crypto
In 2015, New York government introduced what is called BitLicense regulation. The regulation state that any company that is willing to do business in cryptocurrency must acquire BitLicense before doing business.
Russia passed regulation in 2020 called Digital Currencies and Digital Financial Assets Law. The law was introduced to regulate, which did not total ban the use of crypto but limit it use for business.
In 2022 Thailand government announced to the press that profits resulting from crypto trading or investing will be subject to 15% tax but the exchanges will be free from paying this 15% tax.
While in many country the use cryptocurrency is not total ban but regulated, here is the list of countries that ban the use of cryptocurrency.
Countries where cryptocurrency is total ban
o Algeria
o Bangladesh
o Egypt
o Iraq
o Morocco
o Nepal
o Qatar
o Tunisia
The competition with banks
Even in the countries where cryptocurrency is allowed, there are banks and other financial infrastructure that are banning the use of crypto. In almost every country there is bank(s) that have banned the use of crypto for many reasons unknown to everyday user but we can speculate that banks around the world view cryptocurrency as a threat to the more centralized and controlled existing financial infrastructure. Also the way cryptocurrency work and how it’s impossible to accurately truck funds in the blockchin, which gives criminal a way to avoid detection in fact according data group Chainalysis in 2021 “criminal abuse of cryptocurrency creates huge impediments for continued adoption, heightens the likelihood of restrictions being imposed by banks” hence giving the banks other reason to ban cryptocurrency while at the sometime limiting the competitions.
Conclusion
With the growing potential of DeFi (Decentralized Finance), more restriction around crypto can be expected due to the fact that everyone is anonymous in DeFi (users can make transaction without providing any personal information to the exchanges). Bank can act as last line of defense for government if it happens that they need to put some restriction because more people still need to transfer their funds from their bank account to DeFi exchanges. They are many factors affecting the price of each crypto but the crypto world it’s too big to collapse now.