Can a Country Permanently Ban Cryptocurrencies? What will be the impact?
Over the past year, the news of some countries trying to ban or limit the use of cryptocurrencies in their respective regions have emerged and significantly disrupted both the market and investors’ sentiments. In February 2021, the Nigerian government issued a circular stating that no banks in the country would be allowed to facilitate the trading of digital currencies.
Even China has more than one time tried to put a ban on cryptocurrency trading and purchase in the country. In 2021 itself, the Chinese government instructed the national banks to stop supporting crypto transactions. All this caused a major impact on the crypto market and was the reason behind the recent plunge in cryptocurrency prices. The Reserve Bank of India had also put a ban on crypto trading, which was eventually struck down by the Supreme Court in 2020. With India being one of the biggest markets for cryptocurrency users/traders, putting an outright ban on cryptocurrencies in the country is neither feasible nor possible.
However, the thing to notice here is that no country has yet put a complete ban on cryptocurrencies. And honestly speaking, they cannot actually do that. We will explain why. But, let’s first discuss the reasons behind these so-called crypto bans.
Why are the world governments hell-bent to ban cryptocurrencies?
In its statement clarifying the reason for the ban, the Nigerian government said that it was concerned about the possible use of cryptocurrency in criminal activities like terrorism. This is similar to the answers given by many other countries that previously tried to put a ban on cryptocurrencies.
However, the real reason for governments to not support cryptocurrencies, as clarified by many cryptocurrency experts and leaders, is that governments do not and cannot accept something they will not control. The use and popularity of cryptocurrencies are not in the direct interest of governments and banks, as these digital currencies are neither issued nor controlled by centralized entities. This is probably the main reason why the world governments have so far shown their unwillingness to regulate or accept cryptocurrencies.
Can any country ban cryptocurrencies completely?
No. How would someone ban something that is not even in their control?
One of the main reasons why no country can put a complete and permanent ban on cryptocurrencies is that they do not control them. Cryptocurrencies, by nature, are independent of centralized authority and cannot be supervised or controlled by any single entity. Moreover, crypto transactions are based on the concept of high privacy and neither crypto wallets nor users can be appropriately tracked based on their trading activities.
Another reason why it is nearly impossible to completely ban cryptocurrencies is the high popularity of cryptocurrencies in the world. There are billions of people trading cryptocurrencies at present, and they are not going to stop no matter what the governments do. For example, when the Nigerian bank put a ban on crypto trading in the country, Nigerians started peer-to-peer trading bitcoins, which is a trading method that requires no bank deposits. This again supports the fact that cryptocurrencies are beyond any centralized system and can operate even without the support of authorities.
And last but not least, cryptocurrencies cannot be banned because they are the future. With high-potential crypto projects such as Libra Ecosystem working to resolve the most complex problems of the world, putting a ban on cryptocurrencies would be like denying a chance to grow using the newest technologies. Not just e-commerce or finance, but literally every industry stands to benefit from cryptocurrencies and blockchain.