In 2021, China was consistently amid all the headlines in the world of crypto for its government’s stance towards cryptocurrencies. The Chinese authorities’ large-scale crypto crackdown led to all crypto activities being closed in the country. However, China isn’t the only country that has banned cryptocurrencies. Several others, such as Bangladesh, Tunisia, Algeria, Morocco, Oman, Qatar, Iraq and Egypt, have all banned cryptocurrencies as well. Temporary bans on crypto have been introduced recently by Iran and Kosovo due to the excessive energy consumption of the crypto mining industry.
The bans in most countries are a result of the respective authorities’ concerns about the use of cryptocurrencies and crypto platforms for financing illegal activities. Cryptocurrencies are essentially decentralized, i.e., crypto transactions aren’t regulated, which makes them untraceable. Governments around the world are also worried that the wider adoption of cryptocurrencies would lead to the destabilization of their existing financial systems, which may jeopardize both national and global economies.
2021 also saw cryptocurrencies being discussed by the governments of the USA and India, which don’t want to ban crypto altogether but want regulations. In both countries, the crypto industry has boomed over the last few years, and the respective governments don’t want to put a stop to the industry’s development completely.
China’s crypto ban was enforced in several phases. The Chinese government initiated the ban by first prohibiting its financial institutions from dealing with crypto transactions. Next, the government stopped cryptocurrency mining, and finally, in September, it announced the complete ban on crypto in the country. Before the crackdown, China was one of the world’s biggest crypto mining hubs.