In Russia, cryptocurrency mining is not prohibited, but it is not officially considered as a means of payment.
Bitcoin and other cryptocurrencies are becoming increasingly popular among users around the world, but there is no single legal framework for their operation. A number of states are moving towards a complete ban on cryptocurrencies, others allow their production (mining) and use, but introduce various restrictions, while retaining regulatory functions.
In Russia, cryptocurrency mining is not prohibited, but it is not officially considered as a means of payment. On January 21, the Central Bank proposed to ban the issuance, mining and circulation of cryptocurrencies in the Russian Federation, while the Ministry of Finance considers it necessary to regulate cryptocurrencies without banning them.
CMN has collected the most notable examples of regulatory practice in individual states.
CRYPTOCURRENCY BAN AND REGULATION IN DIFFERENT COUNTRIES
Cryptocurrencies in India are in a gray area: there is no official ban on their sale and purchase, but the authorities consider such currencies illegal tender. In other words, it is forbidden to cash out and pay with cryptocurrencies.
A bill to regulate cryptocurrencies is currently being considered. Its first draft, introduced in 2021, would ban all “private cryptocurrencies” but allow exceptions to promote blockchain technology. This provided for the creation of its own official digital currency in the country.
However, the document was never considered. The new version is planned to be submitted for discussion at the parliamentary session, which opens on February 1. At the same time, the government says that it will monitor what measures are being introduced to regulate cryptocurrencies in other countries.
According to local media estimates, there are up to 100 million people in the country who own cryptocurrencies.
The use and mining of cryptocurrencies is prohibited in China. The first order in this regard was issued in 2009 by the Ministry of Commerce and the Ministry of Culture of the People’s Republic of China. Their circular prohibited the sale of real goods for virtual money. Since then, Chinese regulators have consistently continued to impose new restrictions on the public and businesses.
On December 5, 2013, the People’s Bank of China called bitcoin a “fictitious currency” and a “speculative commodity”, noting, however, that citizens can freely transact with it. At the same time, all the risks associated with this lie on them.
On April 1, 2014, the regulator, according to Chinese media, informally demanded that the country’s commercial banks and payment system operators close their bitcoin trading accounts.
In 2017, the regulator banned the initial coin offering (ICO), trading platforms were no longer allowed to exchange virtual money and transactions with them. Later, platforms for the exchange and trading of cryptocurrencies were also banned.
In April 2019, the National Development and Reform Committee of the People’s Republic of China demanded that the mining of virtual currencies be suspended by January 1, 2021.
On September 24, 2021, the People’s Bank of China issued a notice stating that virtual currencies do not have a legal legal status, so any transactions with them are illegal.
On the same day, the National Development and Reform Committee of the People’s Republic of China issued a circular ordering regional authorities to ban the construction of new mining farms and connect such companies to the power grid. Operating mining companies were forbidden to carry out operations on the electricity exchange, they were subject to increased tariffs for electricity.
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Cryptocurrency mining is allowed in Iran, but only on registered “farms”. Trade operations with their use are prohibited in the country, but banks can use the currency created on the territory of the state to pay for the import of products whose import is hindered by sanctions.
Iran accounts for about 5% of the world’s bitcoin mining. This phenomenon became widespread in the late 2010s due to the low price of electricity, the main resource needed for mining. Many residents have created mining power in their homes, and some even in mosques, which receive electricity for free. The phenomenon was so widespread that in the summer of 2021 the authorities were forced to impose a four-month ban on mining due to interruptions in the supply of electricity.
Currently, the illegal production of cryptocurrencies is prohibited, for this it is necessary to register a farm, the electricity for which is supplied at higher export prices. Despite the efforts of the authorities, it was not possible to curtail the illegal production of cryptocurrency.
The sphere is of great importance for the country’s economy, since it makes it possible to earn money under Western sanctions. According to Western and Iranian publications, bitcoin alone brings the Iranian authorities about $1 billion in revenue annually.
In Egypt, on the basis of the law on the Central Bank and on the banking system of the country, the issuance, trade and promotion of cryptocurrency, as well as the creation or operation of platforms for its circulation without the appropriate license from the Central Bank, which has the monopoly right to issue and manage digital currencies, is prohibited.
However, in practice, cryptocurrencies are not used in the country. Back in 2019, the authorities began to explore the possibility of creating an Egyptian digital currency, but this project has been frozen.
Violators of the law face a fine of 1 to 10 million Egyptian pounds (from $63.5 thousand to 635.6 thousand)
The use of cryptocurrencies in Morocco is prohibited on the basis of a decree of the Government Office of the Exchange (Currency), but the relevant legal framework to regulate this issue has not yet been developed.
The country’s authorities point to the risks of anonymous use of virtual currencies associated with money laundering and financing of criminal and terrorist organizations. However, despite this, Triple A estimates that around 2.4% of Moroccans own cryptocurrencies.
In Indonesia, based on the order of the Financial Services Authority of the Republic, financial institutions are prohibited from offering and selling cryptocurrencies, however, the use of cryptocurrencies is allowed on commodity exchanges and in trade. This activity is regulated by the Department of Commerce and the Commodity Futures Trading Regulatory Agency.