Cryptocurrencies are becoming more and more popular in the world. Not only between small and large investors, but also between the countries themselves. And it is that there are already several states that are getting their act together in a field that constantly attracts attention. For this reason, at Roams we have analyzed what is the international scene right now and what is to come in the different countries as far as cryptocurrencies are concerned.
For now, The Savior it is the only country that has admitted bitcoin as legal tender. The adoption of this measure last year meant that both businesses and companies had to accept this cryptocurrency as another payment method in their physical and online establishments.
On the opposite side, that is, those that explicitly prohibit cryptocurrencies, there are almost a dozen countries. Among them are Algeria, Bangladesh, Egypt, Iraq, Morocco, Nepal, Qatar and Tunisiaaccording to data extracted from a report by the US Senate Research Library (LOC).
And the last to join this list has been China. As we all know, the Asian country recently announced the prohibition of these digital assets in its territory, since they ‘alter the economic and financial order’, as stated in the statement from the Central Bank of the Asian country. And even though China has closed the doors to private cryptocurrencies – declaring transactions, mining and advertising illegal – the People’s Bank of China has been conducting tests for the issuance of the digital yuan for two years, with important differences with cryptos like bitcoin. In fact, it has already carried out a pilot test at the Winter Olympics in Beijing.
There are other countries, however, that implicitly ban cryptocurrencies. This means that ‘banks and financial institutions they are prohibited from both exchanging and trading cryptocurrencies such as offering services to individuals/companies that trade with cryptocurrencies’, as indicated in the LOC report itself. In other words, although it is not totally illegal, the authorities do not recommend transactions with this type of digital asset to financial institutions, which limits its use to citizens.
within this group there are a total of 42 countries, among which are Bahrain, Benin, Bolivia, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Ivory Coast, Democratic Republic of the Congo, Ecuador, Gabon, Georgia, Guyana, Indonesia, Jordan, Kazakhstan, Kuwait, Lebanon, Lesotho , Libya, Macao, Maldives, Mali, Moldova, Namibia, Niger, Nigeria, Oman, Pakistan, Palau, Republic of the Congo, Saudi Arabia, Senegal, Tajikistan, Tanzania, Togo, Turkey, Turkmenistan, United Arab Emirates, Vietnam and Zimbabwe. In fact, growth has been significant in the last three years, going from 15 states in 2018 to 42 in 2021, that is, it has practically multiplied by three.
Which countries do not ban cryptocurrencies?
There are a total of 85 countries that do not explicitly or implicitly prohibit these digital assets: Albania, Angola, Anguilla, Antigua and Barbuda, Argentina, Australia, Azerbaijan, Bahamas, Belarus, Bermuda, Bhutan, Brazil, Brunei, Cape Verde, Canada, Cayman Islands, Chile, Colombia , Costa Rica, Cuba, El Salvador, Gibraltar, Guernsey, Hong Kong, Iceland, India, Isle of Man, Israel, Japan, Jersey, Kenya, Kyrgyzstan, Liechtenstein, Malaysia, Mauritius, Mexico, Montenegro, New Zealand, Norway, Philippines , Russia, Saint Kitts and Nevis, Saint Lucia, Samoa, Serbia, Singapore, South Africa, South Korea, Sri Lanka, Switzerland, Taiwan, Thailand, Ukraine, United Kingdom, Uzbekistan and Venezuela, in addition to the 27 member states that are part of of the European Union and the USA.
And it is that the cryptocurrency revolution opens a debate between those who choose to directly accept some of the cryptocurrencies that are in the market today as legal tender -as El Salvador already did with bitcoin- and those who are committed to the development of a digital currency by the Central Bank, what is known as CBDC (Central Bank Digital Currencies). Something that China has already done with the digital yuan and now it seems that new countries such as the 27 of the European Union and the US are joining.
DCASH has been the first CBDC worldwide used in different countries. The Eastern Caribbean Central Bank was the one who activated its digital currency, also known as Diamond Cash. In fact, two new Eastern Caribbean nations have recently joined -Monserrat and Dominica- to those that had already been doing so -Antigua and Barbuda, Saint Kitts and Nevis, Saint Vincent and the Grenadines, and Grenada-. Only Anguilla would be missing to close the circle of this island area.
And for nations, The Bahamas were the first to incorporate a CBDC. Here we go back to October 2020 when the Central Bank launched its own digital currency, which took the name of sand dollar.
Other countries working on issuing a digital currency
The Eurozone has already started the first experiments with the creation of a future digital euro. All this promoted by the growing interest from some 80 central banks -among which is the European Central Bank- in the creation of virtual currencies. The European Commission has already started working on the regulation of the digital euro, which could be ready by early 2023 if everything goes according to plan. The legislation of this digital asset would have to be managed by all the countries that are part of the European Union and it could be by 2025 when it would come to light.
Although yes, the first steps have already been taken within the European Union. It has been the Bank of France together with the Swiss National Bank -not belonging to the EU- who carried out the first test of cross-border payment with a digital currency type CBDC. A project that took the name of Jura and was focused on the wholesale loan market from one bank to another. It was the first time that a transactional movement was made with the digital euro and the Swiss franc.
For its part, the US is immersed in issuing a digital dollar by the Central Bank of the United States (FED). In fact, the Federal Reserve Board has recently published a document that analyzes the advantages and disadvantages of the future launch of a CBDC in addition to the technology that would be used. The document also includes the payment system that currently exists at the national level in the United States.
And it seems that some designs have already been developed that could serve as the basis for the creation of this digital currency, according to research carried out by the Federal Reserve Bank and the Massachusetts Institute of Technology (MIT). Although yes, ‘it is about a completely independent investigation of which the Federal Reserve Board is carrying out’, as the FED itself has added, and, in no case, ‘is it sought to create a digital dollar for the US,’ he adds.
Who seems to be very close is Brazil. The regulation of cryptocurrencies continues to advance in this country. This means that if the bill were to be approved in the Senate – once approved, it would go to the Lower House becoming law – Brazil would become the first Latin American country to regulate cryptocurrencies. This bill includes the basic regulations for digital currency funds and their use and indicates that it will be the federal government that decides the body responsible for regulating transactions with cryptocurrencies.
On Uruguay and Chile The regulation of cryptocurrencies has begun to be debated. In fact, Chile could become the first country in the region to legislate its own BitCoin law if this law were approved in the national congress. A law promoted by the elected deputy and senator Karim Bianchi, in which all the actors would participate, including the citizens themselves. But it seems that things do not stop there in Chile, since the Central Bank of the trans-Andean country has expectations of launching its own digital currency.
In case of Argentina remains to be seen For now, there is nothing on the table, but, according to statements by the president of the Argentine Central Bank, Miguel Fish, «central banks have to issue digital money«. Something that leaves the door open to future plans and that, according to Pesce suggests, could be carried out jointly with the private sector.
We could say that everything will depend on the encouraging future of technologythe truth is that there are already approximately fifty countries that have got down to work with the regulation of cryptocurrencies, either privately or through their Central Banks.
The conclusion seems clear, at least according to the National Bureau of Economic Research (NBER) study: ‘Central banks that collectively represent a fifth of the world’s population, are likely to issue their own general-purpose digital currency in the next three years ( before 2025)’, but at the same time considers ‘it is unlikely that most of the Central Banks of the world will do so in the foreseeable future’. We will see, the future is yet to come.
