Laos yet to legalize Bitcoin and other cryptos
Laos still maintains that the use of cryptocurrencies in the country is illegal. In May, the central bank of the country reiterated the stand with a warning to the public against any dealing with cryptocurrencies.
According to the bank, cryptocurrencies in Laos are illegal. It has banned all financial institutions in the country from conducting any operations involving cryptocurrencies. Also, no individual or institution should make cryptocurrency investments.
The country is not alone since there is also economic heavyweights like China and South Korea that have banned cryptocurrencies in one way or another. India also seems to be heading in the same direction.
But why would governments ban cryptocurrencies? Do the disadvantages outweigh the advantages that the digital currencies bring along?
This question must be ringing in the ear of every cryptocurrency investor who comes across any news of a government banning cryptos. Blockchain has brought too much technology and everybody seems to be enjoying it. The financial sector has benefitted from the security, privacy, and speed of transactions. The Internet of Things has also received a huge boost from the secure data transmission avenue that blockchain network offers. Actually, blockchain has changed almost every aspect of our lives.
However, most governments see cryptocurrencies as a threat to their local fiat currencies. Most feel that the adoption of cryptocurrencies could mean the weakening of their local currency globally. Also, there is the fact that there are no proper crypto regulations and governments can’t seem to find a way of categorizing the digital currencies so that they can be taxed. As a result, most governments see that cryptocurrencies would end up robbing them of revenue since it is hard to trace the spending of crypto users due to the blockchain network privacy.
In Laos, the central bank’s main concern is actually the anonymity of the users (both sender and receiver) of cryptocurrencies. For a cryptocurrency transaction to be complete the sender and receiver only provide their public addresses, which are a combination of cryptographically encrypted letters and digits and the cannot be used to identify the actual owners. This, the central bank fears, would increase the use of digital assets in money laundering schemes.
There are also some sources that say that Laos's authorities are yet to come up with security systems that will protect the cryptocurrency users if they were to be allowed in the country. Therefore, legalizing them would be total confusion in case of discrepancies.