HARD WALLET

Can a country really ban crypto?

The whole maintaining economic power thing is the reason why some countries want to ban crypto, but can they actually do it? Technically, yes. In theory, Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, Bangladesh, and China have all already banned all cryptocurrency transactions and/​or trading. If you were to look at their, uh… law documents, it would say crypto: nah” (non-verbatim, obvs). But how far do these bans actually go? Is it really possible to police cryptocurrencies? And if it isn’t, why are these countries even bothering to try?

Firstly, you and your lil’ memeboi wallets are probably sound if you’re waltzing through Morocco on your gap year and happen to have a few dogecoin in your virtual wallet. You’re pretty unlikely to get nicked in this instance, but the stakes are raised a bit if you have bitcoin, as a lot of the laws are specifically about that currency. That being said, it would be best to not log into Binance for a day of trading using a library computer.

But enacting a ban is very different to enforcing one. As with weed, underaged drinking, or using iPlayer without a TV licence, it’s very hard to actually regulate misuse”. In fact, Morocco banned crypto back in November 2017, but in March 2021, CoinDesk reported that from November 2017 to February 2021, trading volumes [of bitcoin] on [LocalBitcoins] saw a steep 215 per cent increase” in the country. Meanwhile in Iraq, it has been reported that as much as 1 per cent of the population use crypto. This seems insignificant until you consider that only 10 per cent of the population use traditional banks.

The lack of ability to police crypto is obvious. By design, blockchains allow people to make transactions completely anonymously and without the need for banks. It’s sort of the entire point of them. The anonymous Satoshi Nakamoto developed Bitcoin with the intention of making a trustless cash system, which means you don’t have to trust a third party (ie. a bank) to act as an intermediary between transactions. Basically, it’s a system that allows money to go from A to B, and for people to see the wallets and figures involved, but without revealing stuff like which countries are these people in, specifically who they are and what they’re buying. Trying to keep tabs on a system that’s literally designed to be anonymous makes it very difficult for countries to effectively ban crypto.

Traciwininger
Author: Traciwininger

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