You have been in the currency circle for a long time, and you are also confused about whether deposits and withdrawals are legal, and whether you will be allowed to trade. Do you know which country has the largest share of cryptocurrency, which country is the legal currency, and which country can be justified? ?
Let’s take a look at which countries are cryptocurrencies legal?
Cryptocurrencies are currently legal in 119 countries and four British overseas territories. This means that more than half of the countries in the world have legalized cryptocurrencies. 64.7% of countries that have legalized cryptocurrencies are emerging and developing countries from the Asian and African continents.
However, of the 119 countries that have legalized cryptocurrencies, 20 (16.8%) have implemented banking bans. These bans restrict financial institutions from interacting with or using cryptocurrency exchanges.
Europe leads the way with 39 countries recognizing the legality of cryptocurrencies
Europe is at the forefront of global cryptocurrency legalization, with 39 of the 41 countries analyzed (95.1%) recognizing its legality. North Macedonia is the only European country where cryptocurrencies are illegal, while the situation in Moldova remains unclear.
Of the 31 countries in the Americas, 24
(77.4%) acknowledge that cryptocurrencies are legal. Bolivia is the only exception, deeming cryptocurrencies illegal. Six American countries - Guatemala, Guyana, Haiti, Nicaragua, Paraguay and Uruguay - have yet to establish an official stance on cryptocurrencies.
In Africa, only 17 out of 44 countries (38.6%) have legalized cryptocurrencies, while 35 out of 45 countries in Asia (77.7%) recognize cryptocurrencies as legal.
How many countries have encryption laws in place?
Of the 119 countries where cryptocurrencies are legal, only 62 (52.1%) have comprehensive regulations. This number has increased by 53.2% since 2018, when only 33 jurisdictions had cryptocurrency regulations in place.
Of the 62 countries that have enacted regulations, 36 (58.0%) are independent countries, 22 (35.5%) are members of the European Union (EU), and 4 (6.5%) are British overseas territories. It is worth noting that half of these countries are advanced economies and the remaining half are emerging and developing economies.
Half of the countries that have legalized cryptocurrencies have yet to implement a strong regulatory framework. The gap between legalization and full regulation raises potential concerns about investor protection and transparency for businesses operating in the cryptocurrency space in these countries.
Instead, some countries have taken the approach of adapting existing regulatory frameworks to cover cryptocurrencies rather than creating entirely new regulations. This approach typically involves applying established tax and anti-money laundering and financing of terrorism (AML/CFT) laws to cryptocurrency transactions and activities.
Major developed economies such as France, Japan and Germany have successfully established cryptocurrency regulatory frameworks.
In contrast, other major developed economies such as Italy, the United States, Canada, and the United Kingdom face challenges in implementing comprehensive cryptocurrency regulation. The complexity of the regulatory process is compounded by the multiple governments and financial regulators in these countries.
EU member states, on the other hand, adhere to EU-wide regulations regarding crypto-assets. These regulations provide a more unified approach to cryptocurrency regulation within the EU.
Which countries use cryptocurrencies as legal tender?
Only two countries, El Salvador and the Central African Republic (CAR), have adopted cryptocurrencies as legal tender. Of these, El Salvador remains the only country actively using cryptocurrencies as legal tender today.
El Salvador made history by legalizing Bitcoin through the Bitcoin Law in August 2021. The landmark legislation cements Bitcoin’s status as legal tender and its automatic convertibility into U.S. dollars. In January 2020, El Salvador passed the Digital Securities Law, taking another step towards embracing Bitcoin. The law classifies Bitcoin as a "digital commodity" and all other crypto-assets as "securities."
Despite these progressive steps, Bitcoin adoption remains relatively low in El Salvador. According to Triple-A’s Cryptocurrency Ownership Study, only 1.72% of the country’s population owns crypto assets. Additionally, El Salvador ranks 55th in the Cryptocurrency Adoption Index.
The Central African Republic (CAR) became the first African country and the second in the world to adopt Bitcoin as legal tender in April 2022. The decision drew mixed reactions, with some praising it as a step toward financial inclusion and others expressing concern over the potential impact on the country's already fragile economy.
However, CAR’s Bitcoin experiment proved short-lived. In March 2023, the government overturned the decision to legalize Bitcoin. The culmination of economic challenges is believed to be the reason for this failure. These challenges include high poverty indicators, low internet penetration and limited access to electricity. All of this makes widespread adoption of Bitcoin as a fiat currency difficult to achieve.
Which countries are neutral towards cryptocurrencies?
Of the 166 countries analyzed, 25 are considered “crypto-neutral” because they do not give a clear legal status to the use of cryptocurrencies. Central banks and governments in 24 of these countries have implicitly banned or demonstrated serious concerns and restrictions on the use of cryptocurrencies. Uruguay, on the other hand, is an exception, showing a more cautious optimism.
Although cryptocurrencies remain unregulated in Uruguay, the central bank has actively evaluated cryptocurrency pilot projects with a focus on developing risk-based regulations. Additionally, the country has proposed a crypto bill that, if approved, would introduce the first regulatory framework for cryptocurrency exchanges and services in Uruguay.
Countries that deem cryptocurrencies illegal
22 countries have adopted stricter measures to completely ban the use and trading of cryptocurrencies within their borders. This represents a significant increase of 13 countries compared to the 9 countries that have banned cryptocurrencies in 2021.
The majority of these countries (13) are located in Africa, with an additional seven countries located in Asia. North Macedonia in Europe and Bolivia in the Americas represent the only countries in their respective regions to implement explicit cryptocurrency bans.
Despite its illegal status, cryptocurrency ownership persists in China, Egypt and other countries
It is estimated that 4.08% of China’s total population, or 58 million people, currently own cryptocurrencies. As a result, despite China’s total ban on cryptocurrency activities since 2017, it still has the second-largest cryptocurrency ownership in the world.
Data from Triple-A’s Cryptocurrency Ownership Report further shows that digital asset ownership remains prevalent in:
In Egypt, cryptocurrency trading has been declared illegal and banned under Islamic law. It is estimated that 2.95% of the total population (3.3 million people) currently own cryptocurrencies. In Bangladesh, cryptocurrencies have been banned since 2014. An estimated 2.43% of the total population (4.2 million people) currently owns cryptocurrencies.
In Bolivia, the government calls Bitcoin a "pyramid scheme." It is estimated that 1.98% of the total population (246,000 people) currently own cryptocurrencies.
In Iraq, cryptocurrency trading is punishable by money laundering-related charges. It is estimated that 1.81% of the total population (822,000 people) currently own cryptocurrencies.
In Myanmar, owning or trading crypto assets can result in jail time or fines. It is estimated that 1.44% of the total population (785,000 people) currently own cryptocurrencies.
This is despite strict rules and penalties for the use of cryptocurrencies.
Four Banned Countries Rank Top in Global Cryptocurrency Adoption! Egypt, Nepal, Morocco and China are among the top 30 countries in Chainalysis's 2022 Global Cryptocurrency Adoption Index despite outright bans on cryptocurrencies. The index goes beyond pure ownership to assess the relative levels of cryptocurrency participation across countries. It highlighted that despite legal restrictions, these countries still exhibit high levels of cryptocurrency usage.
