Bitcoin Regulations

Government Law

Written by Bajapai (2019) country such as Russia, China and Vietnam have totally banned the use of Bitcoin. This is resulting of the nature of cryptocurrency which is decentralized can cause many illegal problems such as drug trafficking and illegal transaction. In addition, in 2017, Liang stated that China banned all the “Initial Coin Offering” related cryptocurrency because it is accused that “Initial Coin Offering” is a government unauthorised fundraising campaign. Since the “Initial Coin Offering” does not need to be approved by the authority and cannot be controlled by the government. In other word policy such as Know Your Customer policy had been implemented in the cryptocurrency ecosystem. For instance, those who like to invest, or purchase cryptocurrency would need to identify themselves to the authority using identification card. Cryptocurrency exchange or service provider will not entertain those who cannot show their identification card and showing a fake identification card. The “Anti-money laundering” and “Know Your Customer” service is implemented in South Korea’s exchange so that the authority will keep track of the investor stated by Ahn (2018).

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History of Bitcoin Getting Ban

The government create laws against cryptocurrency, will affect hoe the investor view cryptocurrency. When the government created the law for cryptocurrency, it limits the usage of cryptocurrency. For instance, in 2018, Reina stated that the price of Bitcoin plummeted after the government of China declare of closing all the domestic cryptocurrency exchange. The cause of the price of cryptocurrency plummet due to the number of usages of cryptocurrency decreases and losing its value. Different from China, the finance minister of Russia banned cryptocurrency but not the blockchain technology (Sahoo,2017). The government knew positive effect of blockchain on the future. The Russia government totally inhibit the negative impact of cryptocurrency but still let investor have hope for future blockchain development. In Vietnam, it is legal to trade and hold bitcoin but it is illegal to pay using Bitcoin. Bitcoin is illegal as a payment tool.