In as much as it is true that some countries have considerably limited the licensing and operations of bitcoin exchanges, there isnâ€™t any known jurisdiction that has out-rightly banned bitcoin.
Many jurisdictions are currently working on modalities of integrating blockchain technology into the main stream financial systems. Kenyan ministry of lands recently indicated the possibility of using blockchain as the anchor technology in its land registry. This will eradicate cases of double registration/issuance of title deeds.
Bitcoin is totally independent from the government regulated financial infrastructure. This explains the recent resistance stemming from ministries of finance.
Is bitcoin predominantly used in illegal transactions?
Crime has been in existence since time immemorial. Bitcoin came into use in 2009. Bitcoin is money, and all forms of money are characteristically used in both legal and illegal exchange of goods and services.
Research shows that bitcoin accounts for only 4% of illegal payments; with cash, credit cards and bank transfers leading the way in financing criminal ventures.
As a currency, bitcoin has the potential to make money much more secure and offer some form of a cushion against financial crime. For starters, it is impossible to counterfeit the currency. All transactions carried out on the blockchain network are irreversible, completely eliminating any chances of illegal charge-backs.
Every individual transacting using bitcoin remains in full control of the payments they make. Unapproved charges associated with credit cards are also eliminated. Additionally, as a currency deeply anchored in code, bitcoin is heavily protected by encryption, backups and digital signatures.
Do characteristics of bitcoin make it ideal for criminal payments?
It has been pointed out that the privacy and irreversibility associated with bitcoin payments makes it ideal for financing crime. However, wire and cash transfers already possess these features.
In the long run, bitcoin will probably be subjected to similar regulations as traditionalÂ fiat currency. And there are zero indications that bitcoin will either alleviate or exacerbate criminal payments.
If history serves us right, significant technological breakthroughs have always been frowned upon and labeled as controversial. Just like the internet, bitcoin will eventually find its ultimate position in technological world, its here to stay.