Governments do not like what they cannot control. We have seen this time and time again throughout history. Bitcoin is no exception. It wasn’t until recently that bureaucrats sat up and began to take notice of what was happening with these new digital coins. One by one, countries have begun restricting – if not outright banning – bitcoin and other cryptocurrencies.
So where do countries currently stand with all of this? Here is a quick run-down of the latest developments for countries on the bitcoin world stage, both in the public and private sectors.
China has banned exchange trading for bitcoin and other cryptocurrencies. The central bank wants to maintain control over all digital currencies in the country. Since the ban began in the fall, China began developing their own cryptocurrency. Testing is being conducted between commercial banks and China continues to slowly develop its state-sponsored currency.
The country also has an ICO ban in place and the government position is that ICOs are fraudulent. Interestingly, 58% of worldwide bitcoin mining takes place in China. Coal and hydroelectric electricity are the main sources of energy for the mining operations.
Russia, like China, is creating its own cryptocurrency.The new state-sponsored CryptoRuble will allow the country to bypass sanctions from other countries. Russia has simultaneously been working on new laws to restrict bitcoin and other altcoins.
ICOs are an area which Russia would like more regulation. The intent seems to be to regulate ICOs as securities and Russia is hoping that any legislation that is passed acts as a model to other nations.
The United States routinely issues warnings regarding anything cryptocurrency related. Statements from the SEC warn investors about the risk involved with ICOs. The agency has even gone so far as to take legal action against specific ICOs they deemed fraudulent.
Bitcoin continues to chug along as the cryptocurrency of choice for retailers in the United States who wish to accept it as a payment option. These companies include giants such as Microsoft, Expedia, and Overstock. News broke this week that Ebay may also be close to adding bitcoin as a payment option, and even the Olympic Luge Team has announced they will begin accepting donations in bitcoin.
The United States is not immune from cryptocurrency fever and the brokerage firm Coinbase added Bitcoin Cash to the lineup of digital currencies traded. Coinbase also brokers in bitcoin, ethereum and Litecoin.
Adding to the mix of state-sponsored digital currencies, Sweden is involved with the development of its own called e-krona. Sweden is one of the first western nations to do so and many speculate this will lay the groundwork for a cashless society in the country. The central bank board is expected to take a position on the development of e-krona sometime in 2018.
Interestingly, the Swedish co-founder of bitcoin.com has sold all of his bitcoin and is now investing in Bitcoin Cash. Emil Oldenburg declared bitcoin “virtually useless” because of high transaction fees and long lead times.
Adding to the ever-growing list of central bank currencies, Japan has begun development of the j-coin. The currency is in the early stages of creation but is likely to happen as the country looks forward to the 2020 Olympics in Tokyo. Jamie Dimon recently called attention to this digital currency in comments he made to the IIF.
The government has been very restrictive with bitcoin, calling it illegal at times. The government also warns investors about ICOs and will regulate virtual currencies as needed.
Estonia is another nation interested in a government cryptocurrency. The government has full intentions of developing the estcoin. Meanwhile, prosecutors in the country have been confiscating bitcoin from suspected criminals.
South Korea currently has a blanket ban on all ICOs, however, it is rumored the Financial Services Commission (FSC) is looking to lift the ban and allow professional investors to do ICOs.
The vice-chairman of the FSC said in a statement on December 8 the government does not consider cryptocurrencies money and will regulate them to prevent illegal activities. Additionally, South Korea has banned bitcoin futures.
A recent hack of YoBit, a South Korean cryptocurrency exchange, forced the company into bankruptcy. North Korea is suspected to be behind the hack.
Cryptocurrencies are for the most part unrestricted but plans for regulation are forthcoming to help prevent tax evasion and money laundering.
Venezuelans lucky enough to own bitcoin are using it to buy essential goods as the bolivar plummets in value. Bitcoin miners are now required to register with government officials.