Cryptocurrency Legalization In the World: Where Crypto Is Banned And Where It Is Open to All

Cryptocurrencies are becoming increasingly popular around the world. It is one of the few ways to make a lot of money quickly — sometimes in just a couple of days or hours. But not everywhere can it be used freely.

In some countries, crypto is allowed; in others, it is under a ban or with severe restrictions. In this text, we will tell you where you can safely work with cryptocurrency, and where there may be problems with it. Also, we will consider why the authorities of some countries are trying to keep crypto under control.

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Why Nations May Restrict the Use of Cryptocurrencies

Since the end of the 19th century, most nations have had a state monopoly on money issuance. Therefore, no state is ready to fully equate crypto with conventional currency. In addition to violating the money emission monopoly, the authorities can ban or restrict crypto for such main reasons:

• Fighting terrorism, drug sales, and other illegal activities. Bitcoin and other cryptocurrencies are often used by representatives of criminals because such operations are very difficult to trace and even more difficult to link to specific people
• Protecting citizens from fraudsters. In many countries, lawmakers do not trust cryptocurrency projects and equate them with Ponzi schemes
• Lack of security and vulnerability to technical failures. Authorities in some countries want to protect potential depositors from the risks associated with the use of blockchain
• Financial regulation problems. Unlike centralized financial instruments, regulated by special government bodies, cryptocurrency is decentralized in most cases. So, it is more difficult for the government to force market participants to comply with its decisions
• Fighting tax evasion and corruption. Crypto is used not only by terrorists and drug traffickers, but also by people who want to hide part of their income or to legalize money obtained in a not-quite-legal way through the declaration of assets in crypto. It is also very convenient to give and receive bribes with cryptocurrency, which also does not suit the authorities of many countries
• Complexity of legal regulation. Unlike other financial instruments, for which legal norms were written tens and hundreds of years ago, crypto is a relatively new phenomenon. Therefore, lawmakers have to think through every word in possible future crypto-regulating bills. For the time of their development, bans and restrictions are introduced

Countries Where Cryptocurrency Is Allowed

Most first-world countries allow their citizens to use cryptocurrency both for investment and as a means of payment. Other nations are gradually joining innovation as well. As of spring 2025, the list of countries where cryptocurrency is not banned includes

• Albania
• Angola
• Australia
• Austria
• Belarus
• Belgium
• Bermuda
• Bosnia and Herzegovina
• Brazil
• Brunei
• Bulgaria
• Cayman Islands
• Central African Republic
• Chile
• Costa Rica – in this country, crypto is not considered a currency, and its use is not encouraged, but is not prohibited in any way
• Croatia
• Cyprus
• Czech Republic
• Denmark
• El Salvador
• Estonia
• Fiji
• Finland
• France
• Georgia
• Germany
• Gibraltar
• Greece
• Hungary
• Iceland
• India
• Ireland
• Israel – the authorities do not consider crypto a currency, so instead it is regulated as general goods. However, for legal use, you need to pay taxes, and crypto exchanges have to follow KYC procedures
• Italy
• Jamaica
• Japan
• Kyrgyzstan
• Latvia
• Lebanon
• Lithuania
• Luxembourg
• Malaysia
• Malta
• Marshall Islands
• Mauritius
• Mexico
• Netherlands
• New Zealand
• Nicaragua – the government of this country has not yet taken any measures to regulate crypto
• North Macedonia
• Norway
• Palau
• Pakistan
• Panama
• Philippines
• Poland
• Portugal
• Romania
• Samoa
• Singapore
• Slovakia
• Slovenia
• South Africa
• South Korea
• Spain
• Sweden
• Switzerland
• Tanzania
• Tonga
• Trinidad and Tobago
• Tuvalu
• USA
• Uzbekistan
• Vanuatu

However, the conditions for using crypto in these countries are different. In many countries from the list above, cryptocurrency is not banned, but it is not recognized as legal tender either. It is not a ban, but it is not a legalization either.

According to most experts, the most favorable conditions for crypto investors are offered by the following countries:

• Australia
• Bermuda
• Cayman Islands
• Panama
• Singapore
• Switzerland
• USA

Also, favorable conditions for investors are available in Hong Kong (PRC region) and the United Arab Emirates (subject to a number of current restrictions).

Countries Where Cryptocurrency Is Banned or Severely Restricted

A complete ban on any crypto transactions is in place in the following countries:

• Algeria
• Afghanistan
• Bangladesh
• China, excluding Hong Kong
• Egypt
• Morocco
• Namibia
• Nepal

Many countries do not ban crypto for their citizens but prohibit banks from performing transactions with Bitcoin and other coins. Such a ban is in place in:

• Argentina
• Bolivia
• Cambodia
• Canada
• Colombia
• Ecuador
• Iran
• Jordan
• Namibia
• Nigeria
• Qatar
• Russia
• Saudi Arabia
• Taiwan
• Turkey

In Canada, banks can work with cryptocurrencies subject to AML/KYC regulations. Restrictions apply mostly to cryptocurrency exchanges and investment funds, but there is no total bank ban.

Some countries don’t allow their citizens to use cryptocurrencies to pay for services and goods without prohibiting purchase and ownership. Such countries include:

• Indonesia
• Thailand
• Vietnam

The only country in the world where mining is banned without any other restrictions on crypto is Kosovo. The official reason for the ban is the high cost of electricity, for which some of the locals do not pay. A similar ban on mining is active in most provinces of China.

Ukraine also has a unique restriction: citizens are not allowed to buy cryptocurrency using hryvnias, Ukraine’s national currency, but they are permitted to purchase it with U.S. dollars or euros.

In the UK, cryptocurrency is fully legal. However, the crypto ATM network that previously operated there was banned in 2022 because its operator failed to meet legal requirements.

Countries with Uncertain Crypto Status

In some countries, the legal status of cryptocurrency is unclear. It is neither explicitly banned nor officially recognized or regulated by law.

This includes most Central African nations, as well as Myanmar, Uruguay, Peru, various Caribbean island nations, and countries in Polynesia.

Countries with Actively Emerging Crypto Status

Kazakhstan has been actively regulating cryptocurrency mining and exchanges since 2022. A legal framework requiring crypto exchanges to report taxes has been in place since 2023.

Summary: What Is Allowed in Different Countries

In Russia, cryptocurrency can be used for investment, trading, and mining if you pay taxes. But it is not allowed to pay for goods and services within the country. Stablecoins, ICOs, and any transactions with anonymous addresses without the approval of the Central Bank are also prohibited.

The rules are different in other countries:

• USA – Cryptocurrency is legal but strictly regulated. Users must pay taxes, comply with identity verification (KYC) rules, and use licensed platforms
• Canada – Crypto is legal, but many banks and exchanges operate under various restrictions. Several major platforms have left the market due to stricter regulations
• Japan – Cryptocurrency is officially recognized as an asset. All exchanges must be licensed and operate under strict regulatory oversight
• European Union (EU) – Since the end of 2024, the EU has adopted the MiCA (Markets in Crypto-Assets) regulation, establishing unified rules for all member states
• Brazil – Crypto is legal and mainly used for investment purposes. The Central Bank of Brazil is developing new regulations, especially concerning stablecoins
• Mexico – Cryptocurrency is allowed, but banks cannot work with it unless they receive regulatory approval
• Israel – Crypto is treated as property, and taxes are applied to income from its use. The country is also discussing the launch of a digital shekel
• Australia – Cryptocurrency is considered an investment asset. Authorities are updating regulations to protect users while supporting technological innovation

Even when cryptocurrency is legal in a country, this does not mean it can be used without restrictions. Before buying, selling, or transferring crypto, it's important to understand the local laws. Also, be aware of the regulations in the country where your exchange or wallet is registered.

FAQ

Which countries have adopted and legalized cryptocurrency?

Cryptocurrencies are legalized and regulated in most developed countries. Some notable examples include:

• United States – Legal, but under strict regulation. Users must pay taxes, follow KYC/AML rules, and use licensed exchanges
• Canada – Legal, though banking access is limited. Regulations have become more stringent in recent years
• European Union – A unified legal framework (MiCA) has been in effect since December 2024, applying across all member states
• Japan – One of the first countries to legalize crypto. All exchanges must be licensed and operate under tight regulatory control
• Brazil – Cryptocurrency is legal and regulated, with particular focus on stablecoins and upcoming central bank-led legislation
• India – Not banned, but subject to heavy taxation. Its legal status remains ambiguous

Cryptocurrency is also legal in Australia, the United Kingdom, South Korea, Singapore, Switzerland, and many other countries — though each has its own regulatory approach.

Where can I legally pay with cryptocurrency?

As of May 2025, only a few countries officially recognize cryptocurrency as a means of payment:

• Central African Republic — The only country where cryptocurrency is officially recognized as legal tender
• El Salvador — Bitcoin's status as mandatory legal tender was revoked in February 2025. However, its use is still permitted

In many other countries, while cryptocurrency is not considered official currency, it can still be used for payments if both parties agree, and relevant tax and regulatory requirements are met. Such countries include:

• Australia
• Germany
• Japan
• Portugal
• Singapore
• Switzerland
• United States

Even in these countries, using crypto for payments may involve tax reporting, and businesses accepting it must often follow specific compliance rules.

Which countries ban cryptocurrency?

The following countries have a complete ban on owning, trading, or mining cryptocurrencies:

• Afghanistan
• Algeria
• Bangladesh
• China (excluding Hong Kong)
• Egypt
• Morocco
• Nepal

Some countries do not ban cryptocurrency entirely but impose certain restrictions, such as prohibiting its use for payments for goods or services. These countries include:

• India
• Indonesia
• Turkey

In these restricted countries, while cryptocurrency may be allowed in certain contexts, its use for transactions or business is limited.

Which countries are the most favorable for crypto investors?

The following countries offer the most favorable conditions for cryptocurrency investors, thanks to beneficial tax policies, clear regulations, or supportive infrastructure:

• Bermuda — Offshore jurisdiction with a crypto-friendly regulatory environment
• Cayman Islands – Popular offshore destination with favorable laws for crypto businesses and investors
• Germany — No capital gains tax on crypto assets held for more than one year.
• Malta – Known for its ‘Blockchain Island’ initiative, offering attractive conditions for crypto companies
• Portugal — Offers tax benefits for individuals, including zero tax on crypto gains for personal use
• Singapore — No capital gains tax and a supportive regulatory framework
• Switzerland — Features clear, transparent regulations and a highly developed crypto ecosystem
• United Arab Emirates (Dubai, Abu Dhabi) — Special crypto zones with clear rules and government support for blockchain innovation

These countries are often chosen by individuals and companies looking to optimize taxes and operate in a clear regulatory environment.