Countries where Bitcoin is legal: Regulation and adoption

While Bitcoin was the original cryptocurrency to put blockchain on the map, we’ve seen countless projects emerge over the last decade. From fungible cryptocurrencies (where each token holds the same value as the next) to the ever-booming non-fungible token (NFT) market, the adoption rate of the innovative technology is explosive.

The global growth of cryptocurrency has skyrocketed, boasting a whopping 881% increase in adoption over the last year.

What is blockchain?

At the heart of it, a network on blockchain technology refers to a decentralised platform that makes use of a database shared across multiple computers (nodes).  Instead of information resting on one centralised storage system, blockchain distributes the same information across the world at a peer-to-peer level; offering a completely transparent network that is secure from manipulation and hacking. It removes the need for a middleman (like a bank) and gives individuals the ability to control their own finances and transactions without relying on an intermediary.

Cryptocurrency and government regulation

The biggest use-case we’ve seen for blockchain application lies in cryptocurrency – but this has been met with resistance from governments and authorities with concerns of regulation. This is because with blockchain, although everything is transparent, it is also anonymous – leaving room for illicit behaviour like money-laundering and black market and silk road purchases. As Bitcoin and other cryptocurrencies have become more popular as a means for investment and cross-country transactions, there have been three different approaches from government authorities:

1. Regulation with broad acceptance
2. Regulation with restriction
3. Blanket bans

The quick rise in attention adoption of cryptocurrency has put governments across the world under pressure to make decisions on how cryptocurrencies can be implemented in the country without risking the protection of citizens and their funds. While Bitcoin and the concept of cryptocurrencies are already a decade old, the market itself is still constantly shifting in price, regulation, and transaction volume.

The volatility of Bitcoin lends itself to a risky asset in investment, but it reduces the effective use-case for cryptocurrency to exist as a legal global tender as it stands. Other cryptocurrencies like stablecoins are designed to mitigate the volatility, but they still rely on fiat (or national) currencies to draw value from – offering a digital alternative to traditional cash but still suffering from relying on only country’s economic stability.