Why haven't governments illegalized bitcoin transactions?

[shield132]

I have heard some stories about making bitcoin transactions illegal. It's all been a humor and I don't think any government have officially made bitcoin transactions illegal. Why is that?
Many governments are trying to regulate bitcoin, control exchanges and force people to be authorized. But I am sure government wish bitcoin was not created and there was no trouble of regulating bitcoin. They  prefer their fiat to any other currency.
Why no government have made bitcoin transactions illegal?
I think they want to avoid creating an underground market.They don't want bitcoin to be traded like Alcohol and drugs. They have to accept bitcoin as they cannot stop a decentralized network and now they can only try to regulate it. Do you agree with me? Is there any other things have caused governments to not make bitcoin illegal?

It's pretty easy to make bitcoin illegal and for example India plans to do that but why? Is there benefit behind this idea? I think no. Also there are a lot of mining datacenters, exchanges which bring a good money in budget. Also governments at some point need bad guys, money is made during these processes. Also if you make bitcoin illegal can you imagine what it will cause? Even harder ways for governments to solve another upcoming problem. By banning something you can't stop it, you just make it difficult to detect again and I think that must be clear for everyone.
Also why to say that governments would never wish bitcoin to be created? After all they happily try to get something from it, implementing of blockchain technologies.

[bellaayu]

The local currency is the only legitimate tool to make payments. If Bitcoin is authorized, it will affect the local currency. In addition, Bitcoin is volatile, so it cannot be controlled by the government.

The government is currently researching Bitcoin. However, I am quite pleased that in my country Bitcoin is not banned. Maybe this will be a positive signal that in the digital age now, Bitcoin will be a good solution to cope with unemployment.

[elisabetheva]

Obviously to determine that bitcoin can be legalized by the government, of course it has several provisions that must be prepared in order to become legal bitcoin. many developing countries are not familiar with and already know about bitcoin because internet network problems do not cover all regions. it will also be a consideration that cannot be ignored yet also its own regulatory issues.

[DarkDays]

Only countries with a partial or incomplete democracy would ever consider banning Bitcoin transactions.

If you live in a country where this has been considered, get out quick. You are clearly living in a nation that is on the brink of dictatorship.

Bitcoin and blockchain tech stands to revolutionize so many industries, to ban that would be banning progress.

F*** THAT.

[sehoon]

Because it is not something that should get decided on. It is something complex that there might be some regulations that is going to be unfair on both sides. In my country, I was just lucky that the government really don't mind the people using cryptocurrency but they always tell us to be careful of using it.

[alberdina]

I have heard some stories about making bitcoin transactions illegal. It's all been a humor and I don't think any government have officially made bitcoin transactions illegal. Why is that?
Many governments are trying to regulate bitcoin, control exchanges and force people to be authorized. But I am sure government wish bitcoin was not created and there was no trouble of regulating bitcoin. They  prefer their fiat to any other currency.
Why no government have made bitcoin transactions illegal?
I think they want to avoid creating an underground market.They don't want bitcoin to be traded like Alcohol and drugs. They have to accept bitcoin as they cannot stop a decentralized network and now they can only try to regulate it. Do you agree with me? Is there any other things have caused governments to not make bitcoin illegal?

Yes, you are right that it is a consideration for the Government, so they do not legalize Bitcoin. The government wants to set up Bitcoin, but the Bitcoin price cannot be controlled. Perhaps a comparison with gold is always a steady price.

Money laundering and financing for terrorists can occur with the use of Bitcoin. Something like this is a big problem. However, each country must have high security. Maybe we should be patient to see the illegal Bitcoin because so far it can still be developed.

[Gi01]

There is no way the government can illegalize the transactions of Bitcoin. It will just a waste of their time to try and make bitcoin transactions illegal. In as much that bitcoin transactions are on a decentralized network and you can easily be traced, its not gonna be easy to illegalize the transactions of Bitcoin.

[lixer]

I don't see any reason for governments to illegalize Bitcoin.
It doesn't break any laws.
"Bitcoin is just an alternative economy and ideally people should be able to exchange goods in alternative economy if they so choose."
 So governments should leave Bitcoin alone.

There are so many benefits of bitcoin to the government which they know also, but some of them just chose to reject the truth because they know it would eliminate the level of corruption in their financial system, and also give power more to the citizens than them, and they try everything possible just to fight the implementation of the bitcoin scheme.

Most of the government that likes to be transparent with their citizens has surely seen it as benefits to their government and they have started to regulate the system to the cryptocurrency to align with their own rule of operation, and what I expected some of these big countries to do is to follow example since they cannot lay down example for some of these smaller ones that have accepted bitcoin.

[TheUltraElite]

Because it is not something that should get decided on. It is something complex that there might be some regulations that is going to be unfair on both sides. In my country, I was just lucky that the government really don't mind the people using cryptocurrency but they always tell us to be careful of using it.

A government can decide to make crypto illegal if they want to and feel the need to. But declaring something so does not become fixed, they may allow some transactions to be made, in other words make it a quasi-legal approach, regulated so to say. Because the number of people using crypto is also big putting them all in jails for suspected money laundering is not a proper approach. So I think regulation is what can happen but legality may change with time.

Its also true that many people use bitcoin for the reasons they can evade taxes. There are wrongdoers among us too. They need to be corrected, its the other side of the coin.

[Dr.Osh]

although the government does not want to increase illegal transactions such as alcohol and illegal drugs from the use of crypto, it also happens to use fiat. the most important thing, in this case, is, most likely because the government cannot control it so that it causes losses to a country's finances. Well, that's just speculation. many reasons such as an increase in crime and illegal transactions are also one of the reasons.

[pawanjain]

I hardly agree with you because the reasons you specify for bitcoin to be declared illegal by the government are just absurd.
I think that the governments know the potential of bitcoin and they know that even if they declare bitcoin as illegal, people will still be using it and there will be no way they can track people using it.
So they just find it easy to regulate bitcoin instead of taking the burden of declaring it illegal.

Knowing that as long as internet is open bitcoin will continue being use so instead of declaring it as illegal that will only leads their citizens to hide it from them, it's better to work with regulations to ensure that they've still have to control in case that many people inside their jurisdictions will adopt this system, chances to see it more legalized in the future can be dictated if there's more adoptions and end users to demand it's existence.

Yes, exactly!
Bitcoin is truly open source and hence nobody has the right to declare it legal or illegal. Even if somebody does, it won't simply matter for the fact that they are not the ones who control it. A person can only control a thing if he has the ownership over it and bitcoin doesn't have any owner.
Besides that, people should start admiring for the fact that how truly open it is. I wonder why people don't recognize this mere fact and are relying on controlled, centralized fiat currencies.

[thisappointed]

It seems that you don't understand how bitcoin works. The Government can't make the bitcoin transactions illegal, why, because it is a decentralized platform, meaning that no one has the ability to manipulate it except I guess if it is the creator, which is Satoshi Nakamoto. The Government could only banned it, meaning they are going to banned every sites or every way on how to access bitcoin or how you are going to earn it, that is the only thing they could do even though they want to control it.

and bitcoin would be the main virtual money that we are going to use someday, as the predictions says, which is a very good thing to happen to be honest.

[aryadiningrat123]

if the government becomes bitcoin as a currency or makes a bitcoin transaction in my opinion it's not very good because with the price of bitcoin that can not be sure it will be very confusing for them because they think it is very detrimental if bitcoin is down so I think it's not good

[BitHodler]

Its also true that many people use bitcoin for the reasons they can evade taxes. There are wrongdoers among us too. They need to be corrected, its the other side of the coin.

I don't see people evading taxation as wrongdoers. I pay taxes over my profits and fiat on my bank account, but I will not pay a single penny in tax over my cold wallet holdings.

Does that make me a criminal in your book? People are just trying to protect as much of their net worth as possible, which isn't something you can blame them for. It's a shame that we have to do this.

That being said, gold is being used for tax evasion too. This indicates that people are looking for decentralized assets that nobody can take away from them. More power to the people!

[ahmadakbari]

The Government can't make the bitcoin transactions illegal, why, because it is a decentralized platform, meaning that no one has the ability to manipulate it

Stopping something is different from make it illegal. Government can make the rules however they want. Thanks to decentralization, no government can stop bitcoin. But they can make it illegal. They can convict some one who use bitcoin. (If they can find the person. Finding the bitcoin is user is not always impossible)

no one has the ability to manipulate it except I guess if it is the creator, which is Satoshi Nakamoto.

Satoshi Nakamato is not the owner of bitcoin. To stop bitcoin all nodes should be destoyed. Satoshi doesn't control the nodes. Decentralization means no one can control bitcoin. It includes Satoshi Nakamato too.

[bitbunnny]

I don't know why governments would do that. Many bitcoiners have not just right and clear picture about Bitcoin and governments. They are aware of changes, a new technological society and it's not in their best interest to avoid the progress that cryptocurrencies represent. Majority of governments don't want to declare Bitcoin and other cryptocurrencies illegal, they are trying to find the best solution for regulation.

[Artemis3]

Check your facts first! There are many governments in the world that have made the bitcoin transactions officially illegal. Even though they are mostly from 3rd world but some examples are Bangladesh, Egypt, Morocco, Bolivia, Colombia, Ecuador etc. and there are some more countries.

Reference: https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory

Governments definitely want to curb the illegal usage of cryptos but they also understand that it is impossible to enforce a blanket ban on bitcoin or any other crypto transactions due to its nature of operation. Some developed countries like Japan or Germany have studied the crypto properly and provided a framework to curb the illegal usage and promote legal usage of bitcoin. There are some countries as mentioned above, taken the easier route to ban instead of providing a proper framework. So it is incorrect to say that no countries have made bitcoin illegal, there are examples!

Those are 15 countries (count them), out from nearly 200. You could also count the ones where its regulated...

While it looks "easy" to stamp a banning law, in practice your chances from actually preventing people from using it are nearly zero. Sure, it is an annoyance, and sure, many innocent people would get imprisoned, if they don't know how to cover their tracks. But whatever it is they don't want to occur, cannot be stopped by some words on paper. They cannot shutdown Bitcoin, and they cannot block Bitcoin transactions. If two people from any of those countries privately decide to transfer coins one to another, they will never even know it ever happened. Done properly, that is, not revealing it to others, and using Tor, etc.

At least some countries are properly studying it. One of the things that come to light once you read a little, is that you cannot (really) stop it, so issuing a law against it is pointless and can only do more harm than good. And for the same reason, too much regulation is also pointless.

Bitcoin separates money from State and private institutions, this is precisely what makes it so valuable, even more than gold.

[DAVETUN]

Government do not have the capacity to illegalized bitcoin as it is an online token and can only be traded through the internet, the beauty  of technology, thou with it own disadvantage, as some individual takes advantage of the privacy platform and source arm and amunition, drug and other illicit activities, BTC is the currency of this age, government does not have capacity  to illegalize it.

[Mulann2]

Because it doesn't seem illegal to them, why will they legalize something that is not illegal in the real sense? If the argument is about using btc for shady activities then what can be said about fiat? Will  they ilegalize fiat for the shady activities use with fiat? No right? Then I don't see why the government should even consider that.

[lumierre]

I don't see any reason for governments to illegalize Bitcoin.
It doesn't break any laws.
"Bitcoin is just an alternative economy and ideally people should be able to exchange goods in alternative economy if they so choose."
 So governments should leave Bitcoin alone.

They cannot ban it as still, no one can "qualify" Bitcoin, calling it assets, money, shares, and whatnot. What is curious about the USA is that the US authorities will not be able to ban Bitcoin since it is protected by the constitution. This cryptocurrency consists of a code that is essentially part of a Word, which means its restriction will be a violation of freedom of speech in States.