Two-edged sword for countries that banned Bitcoin

[Gyfts]

1. The government cannot earn through Bitcoin in terms of investments, taxes and others.

It'll ultimately come down to this. Banning Bitcoin doesn't really do much for them, except prevent them from regulating it, and therefore profiting from it. So, most countries that do ban Bitcoin, tend to unban it at a later date. Barring any major changes to how people view Bitcoin, I imagine most countries will adopt the latter approach, and start taxing it.

I haven't seen a country successfully pull off a crypto ban yet but China has floated the idea in the past (in fact they might have already implemented a formal ban, but their enforcement is nonexistent).

I think the regulation portion of Bitcoin is the way most countries would go about banning bitcoin by proxy. If they can dissuade people into holding/using crypto by excessive taxes or governmental red tape, that would have the same effect as an outright ban -- and they wouldn't need to invest resources related to enforcement. That being said, to your point, if the government sees an opportunity to profit off crypto they would not hesitate to capitalize.

[rat03gopoh]

I haven't seen a country successfully pull off a crypto ban yet but China has floated the idea in the past (in fact they might have already implemented a formal ban, but their enforcement is nonexistent).

I don't understand what kind of enforcement you'd expect, I think there are a lot of written sanctions in that country for violators. At this point, China is very serious about its policy if it remembers that the first catch is a penalty with severe consequences such as fines and imprisonment.
In fact, no violations have been detected, so it's as if nothing happened.

[savetheFORUM]

It seems that these theories still live in some minds, although they are completely meaningless in the global picture. Maybe some people don't understand the difference between a billion and a trillion, maybe it's something else - but anyone who thinks that big and powerful countries lose something if they ban Bitcoin is living in a big delusion. China is a good example that we have mentioned many times in the past and proof that those at the top did not even blink when they signed laws that prohibit trading and mining.

With some exceptions, for most countries and governments of the world, Bitcoin is just a nuisance that would be good to eliminate, but as our friend Congressman Brad Sherman once said that Bitcoin is just a baby, and babies are pretty harmless, right?

I think you are mistaking country and the citizens. China as a government would not really have a trouble, nor USA or UK, those are huge governments and they will continue to exists without a trouble. But, there are so many Chinese people who got hurt because of that ban, and is that a good thing for the country?

If your citizens are rich, then so is the nation, if your citizens are poor, the government could be strong but the nation would be poorer. Remember, nations do not bankrupt like companies, they just become poorer nations. So if you ban bitcoin, you are causing a lot of people in your nation to become poorer, same as bankrupting, and that is not a good thing for any nation.

[BlackHatCoiner]

A thing that I consider to be impossible to ever be put in place!

It'd be purely arbitrary, and oppressive with a first look. Think of it like this: bitcoin is valuated at $10,000, and you buy 1 BTC. A month later, bitcoin is valuated at $20,000. That's 100% increase in unrealized gains. To take 15% (e.g.) of it, you send 0.15 BTC to the tax collector. Terrifying, huh?

if I wanted to pay a guy I've never met before living in some secret country he doesn't want to reveal let's say $2000 for a GPU or some really expensive Alpaca socks, I wouldn't do it with BTC unless he agrees to an escrow I choose!

So tell me why he should trust you, for not reversing the transaction. You're a total stranger to him as well.

[Bobrox]

First time when Bitcoin launching my country still not legal and they not care how potential earning or profitable earn from Bitcoin, but last year they have great planning how to earn taxes from Bitcoin transaction trough local exchange currency. Every month taxes income always increase up and I sure they will disappointed why not adopt Bitcoin or cryptocurrency transaction more than six or seven years ago?

I don't think have afraid with many countries still not legalize with Bitcoin because when looking on potential achievement from Bitcoin taxes they will realize one day later why not open and make Bitcoin as passive income trough taxes.

[cryptosize]

A thing that I consider to be impossible to ever be put in place!

It'd be purely arbitrary, and oppressive with a first look. Think of it like this: bitcoin is valuated at $10,000, and you buy 1 BTC. A month later, bitcoin is valuated at $20,000. That's 100% increase in unrealized gains. To take 15% (e.g.) of it, you send 0.15 BTC to the tax collector. Terrifying, huh?

Yeah, well, taxing deflationary BTC like it's inflationary fiat doesn't make much sense... whether it's a percent or a fixed amount of sats.

At least with fiat you know the currency is going downhill, so fixed amounts don't bother you that much.

Italy seems did something:

https://www.reddit.com/r/Bitcoin/comments/zy3lix/italy_just_approved_a_02_yearly_property_tax_on/

Good luck with the boating accidents!

[klidex]

Will it interest you to know that government does not need the bitcoin to survive.
Will it also interest you to understand that any government can create job for her citizens without depending on the job opportunity that bitcoin and cryptocurrency with bring? I can rightly say that no government will miss out anything if they did not adopt bitcoin and Bitcoin mining.

There is some truth to what you have said, but don't you think that a country legalizing the adoption and mining of Bitcoin can actually increase sources of income and employment for every citizen of its country.
Although it is true that the country is able to create jobs without relying on Bitcoin and a country will not lose anything by not legalizing or adopting Bitcoin, using Bitcoin can at least help the country and its citizens avoid economic and financial collapse.

[Casdinyard]

It's basically because of the fact that they cannot regulate cryptocurrencies, particularly bitcoin in this situation. They argue that crime could go rampant, and energy will become a massive issue, courtesy of homemade bitcoin mining rigs, if bitcoin is allowed and legalized in their country, which to some extent is true, as some criminal activities and transactions are made through bitcoin let's be honest and the fact that as of now crypto mining is still one big detractor in energy consumption amongst the public. But as OP said in his title, it is a double-edged sword, as it definitely disempowers the public to gain financial capability through bitcoin and the employments it could offer. But the battle is almost over I reckon, more and more countries are accepting of bitcoin compared to those who are against it. Only two outcomes remain.

[danadc]

1. The government cannot earn through Bitcoin in terms of investments, taxes and others.

It'll ultimately come down to this. Banning Bitcoin doesn't really do much for them, except prevent them from regulating it, and therefore profiting from it. So, most countries that do ban Bitcoin, tend to unban it at a later date. Barring any major changes to how people view Bitcoin, I imagine most countries will adopt the latter approach, and start taxing it.

I haven't seen a country successfully pull off a crypto ban yet but China has floated the idea in the past (in fact they might have already implemented a formal ban, but their enforcement is nonexistent).

I think the regulation portion of Bitcoin is the way most countries would go about banning bitcoin by proxy. If they can dissuade people into holding/using crypto by excessive taxes or governmental red tape, that would have the same effect as an outright ban -- and they wouldn't need to invest resources related to enforcement. That being said, to your point, if the government sees an opportunity to profit off crypto they would not hesitate to capitalize.

A country that prohibits crypto is not a very smart thing, firstly because people who already know bitcoin and crypto know that they can make a lot of money and it is quite a lot compared to what the current work system could offer them, the profits and profitability it is much better in bitcoin than in any method of saving that is in local money, prohibitions will be imposed but there will always be ways to avoid it for some, a government cannot tell a person that they cannot even deserve to earn more money, that is something that is not in people's DNA, everyone wants to make money and if they find a way to invest like bitcoin they will not stop government regulations

[Gyfts]

I haven't seen a country successfully pull off a crypto ban yet but China has floated the idea in the past (in fact they might have already implemented a formal ban, but their enforcement is nonexistent).

I don't understand what kind of enforcement you'd expect, I think there are a lot of written sanctions in that country for violators. At this point, China is very serious about its policy if it remembers that the first catch is a penalty with severe consequences such as fines and imprisonment.
In fact, no violations have been detected, so it's as if nothing happened.

It's China -- if they were so inclined they could have law enforcement monitor online financial activity and penalize anyone conducting transactions through crypto. They haven't hesitated on using authoritarianism against anyone they deem to be offenders in the past, of course. I haven't seen reports of severe Bitcoin crackdowns in China but I'm open to being amended if it turns out to be the case from any crypto users subject to Xi Jinping's tyranny.

[Uruhara]

banning bitcoin in a country will only make citizens in that country try to hide from the government in conducting bitcoin transactions. because bitcoin lovers will not be easy to stop just because their country forbids it. because sometimes there are times when we need bitcoin for transactions on the internet.

and the decision to ban bitcoin in a country has clearly eliminated a good opportunity for the country itself. because we are in the digital age. and fast and practical transactions are what is needed in the current era.
the country has clearly refused to walk in technological progress and information that continues to grow, one of which is cryptocurrency. and that could leave them behind in progress from countries that have opened up to bitcoin and cryptocurrencies.

countries that are open to bitcoin and cryptocurrencies and regulate taxation on them would be much better off because they would benefit from crypto transaction taxes. while crypto users and the number of transactions are increasing nowadays. so that the taxes that the government gets will be even higher and that can help increase the income of the state treasury.

but I believe that countries that still reject bitcoin today will one day begin to open up to bitcoin.

[Lucius]

I think you are mistaking country and the citizens. China as a government would not really have a trouble, nor USA or UK, those are huge governments and they will continue to exists without a trouble. But, there are so many Chinese people who got hurt because of that ban, and is that a good thing for the country?

Do you think the average Chinese lived better at the time when it was allowed to trade with Bitcoin in China, or do you think they would live better today if nothing had changed? What about when Bitcoin is in a bear market, doesn't that cause a lot of emotional hurt for most of those who have invested in Bitcoin?

We can look at all this from a romantic-emotional point of view, but do you think that 1.4 billion Chinese are silent and suffer under the communist party only because they are afraid, or have they been brainwashed for decades under that regime to the point that they don't care? I have not heard or seen that millions took to the streets and protested against the ban on Bitcoin trading or mining.

If your citizens are rich, then so is the nation, if your citizens are poor, the government could be strong but the nation would be poorer. Remember, nations do not bankrupt like companies, they just become poorer nations. So if you ban bitcoin, you are causing a lot of people in your nation to become poorer, same as bankrupting, and that is not a good thing for any nation.

I would disagree with your reasoning, because if we're going to go in that direction, are people around the world richer because their country didn't ban Bitcoin - do people live better in El Salvador or somewhere else because of that? Bitcoin exists to be resistant to bans, I don't see why my government should give me the green light to trade or invest in Bitcoin, and I personally don't care what politicians do or think.

[Dickiy]

They do this in the name of curbing illicit financial flow, but the question is, is it worth it? I don't see a winner here if they truly have the love of their country and citizen at heart, they should have regulated it, not banned the coin.

What do you think guys?

In my understanding, this is because the government cannot control the risks that its people will receive if something happens to the market, and most governments in other countries do not fully understand bitcoin and are still in the understanding stage so that later they can issue regulations that can truly create a sense of security.
Let's say Bitcoin has been regulated but Altcoins will force their way in and of course they will become the target of people who want profits without doing proper study first, maybe of the many Altcoins there are potential frauds.
Even though bitcoin is perfect, the culprit is a rotten altcoin which is a consideration for the government.
Even if there are countries that have regulated it and then banned it again, it seems that they are unprepared and are trying to learn it again.

[Aanuoluwatofunmi]

We can also consider bitcoin as the only most recognized cryptocurrency and so with this understanding i expect some of the cryptos being banned abd not the main and major cryptocurrency which is bitcoin, it is clear that many crypto projects have scammed people in the past in which bitcoin never fail their own reputation with it's investors over the years, it has been prominently the best of other form of investments or digital currency which should enjoy the more benefits of legalization, what i sense here is that those countries have an intention for their own cbdc which is eventually not a decentralized crypto as bitcoin which the people want.

[Hamza2424]

I don't think so, even after Bitcoin and crypto Ban in some counties the Decentralized bodies are working from a long timein these countries. Actually after a Bitcoin or Crypto Ban you actually cant stop the community directly. What they need to do is to Cut the whole internet infrastructure from country to eliminate the Bitcoin and Crypto community. As long as internet is working no need to worries community can still stand alone.

[CryptounityCUT]

Freedom is priceless, but it's unfortunate that some countries are depriving their citizens of this right. The banning of Bitcoin is one of them, and the countries doing this are not wise but not entirely foolish because they have their reasons. Nonetheless, they are showing excessiveness in their dispensation of authorities as far as I am concerned. However, one thing these countries have in common is either they don't practice democracy or it is weak in the country.

Not all policies are completely good, and you don't cut the head off because you want to cure a headache. I pondered on this today after responding to a reply, how naive some of these countries could be as they (the government) and their citizens would be negatively affected in the following ways, though they are not the limit:

1. The government cannot earn through Bitcoin in terms of investments, taxes and others.
2. The citizens would be deprived of the fortunes attached to Bitcoin when they own it or do investments with it.
3. The citizens would be deprived of employment that could be paid through Bitcoin only, especially online.
4. They will be forced to embrace fiat with high transaction fees and a slow time of completing most international transactions, unlike Bitcoin.
5. The investors' confidence will slightly be affected since many companies dealing with Bitcoin will not be able to thrive under such conditions, so they go elsewhere.
6. Setback in blockchain and the technology attached to it when countries are yearning for advancement etc.

They do this in the name of curbing illicit financial flow, but the question is, is it worth it? I don't see a winner here if they truly have the love of their country and citizen at heart, they should have regulated it, not banned the coin.

What do you think guys?

I think these countries banned cryptocurrencies because they lack regulation. When in other countries more and more adoption will be, then I think these countries who banned coin will adopt it too. I think that regulation needs to be written down among all other laws about taxes and so on, it is necessary.

[_BlackStar]

A country that prohibits crypto is not a very smart thing, firstly because people who already know bitcoin and crypto know that they can make a lot of money and it is quite a lot compared to what the current work system could offer them, the profits and profitability it is much better in bitcoin than in any method of saving that is in local money, prohibitions will be imposed but there will always be ways to avoid it for some, a government cannot tell a person that they cannot even deserve to earn more money, that is something that is not in people's DNA, everyone wants to make money and if they find a way to invest like bitcoin they will not stop government regulations

There must be some sort of reason why the government banned it in full or in part. The most reasonable thing in my opinion is to comply with the regulations that are made, whereas if you don't want to comply then try moving to a country that doesn't prohibit crypto you are free to use it for anything.

That's how the industry developed, when one country does not allow bitcoin mining or makes it difficult with regulations on crypto-related matters, then miners will look for crypto-friendly countries to continue their mining activities. Implementation of the rules will sometimes not benefit bitcoin or crypto users, but in the end bitcoin cannot be controlled even if it is banned.

[stompix]

It'd be purely arbitrary, and oppressive with a first look. Think of it like this: bitcoin is valuated at $10,000, and you buy 1 BTC. A month later, bitcoin is valuated at $20,000. That's 100% increase in unrealized gains. To take 15% (e.g.) of it, you send 0.15 BTC to the tax collector. Terrifying, huh?

That's the problem with it and that's why even the wealth tax on the super-rich proposed in the leftist of the leftist's states never got approved.
They are trying again but it will most likely fail just like back in 2020 since it has one major flaw, it's stupid!

If they can't find a way to do this for tangible assets that have a clearer market value and aren't that volatile, good luck trying this with bitcoin.

if I wanted to pay a guy I've never met before living in some secret country he doesn't want to reveal let's say $2000 for a GPU or some really expensive Alpaca socks, I wouldn't do it with BTC unless he agrees to an escrow I choose!

So tell me why he should trust you, for not reversing the transaction. You're a total stranger to him as well.

Exactly!
Merchants love final sales, and customers love credit card chargebacks, that's why every single payment has a niche, and you won't see crypto replacing those even if it allows you to "send" coins to the other side of the world in seconds. And even remittance payments are overblown, unless you have the coins and the receiver wants coins too, you will also encounter fees and delays and 3rd parties, that's why we still have empty blocks despite 14 million migrant workers in US alone.

If your citizens are rich, then so is the nation, if your citizens are poor, the government could be strong but the nation would be poorer. Remember, nations do not bankrupt like companies, they just become poorer nations. So if you ban bitcoin, you are causing a lot of people in your nation to become poorer, same as bankrupting, and that is not a good thing for any nation.

I would disagree with your reasoning, because if we're going to go in that direction, are people around the world richer because their country didn't ban Bitcoin - do people live better in El Salvador or somewhere else because of that?

Sometimes Bitcoiners say really silly things, right, how can you even claim that a government banning bitcoin is making you poorer?
Probably some spend too much time just talking about crypto with only people passionate about crypto and what they do all day is again crypto-related so they don't realize how many people currently leave outside this world without even touching it once.