As Bitcoin became more popular, these countries became more suspicious
Bitcoin has come a long way in just a few months. In September 2013 one Bitcoin cost about $120. In December, the value shot up to $1,147 per BTC. Lately, one coin has been trading for around $900.
The Bitcoin market is clearly volatile and one major force pulling it up and down is its level of acceptability.
In November the price skyrocketed as more and more vendors began accepting Bitcoin and interest from China boosted demand.
But things soured in December as China cracked down on trading, barring banks and payment institutions from dealing in the virtual currency. When this happened, the price of one BTC took a 50% plunge.
Governments have taken note of Bitcoin's increasing popularity and many are proceeding with caution. Several countries and their central banks have officially warned people about the risks associated with Bitcoin trading. Some, like China, have gone a step further, introducing laws to control it.
These are the countries that are most uneasy about Bitcoin.
China – As noted above, China introduced a series of prohibitions on Bitcoin trading. The People's Republic believes that virtual currencies can pose "a risk to the public interest and the legal status of the Renminbi." A spokesperson for the People’s Bank of China has said that Bitcoin is "not a currency in the real meaning of the word … It cannot and should not be used as a currency circulating in the market."
Taiwan – Robocoin, the company behind Bitcoin ATMs, had plans to install Taiwan's first machines but was promptly blocked by the country's Financial Supervisory Commission (FSC). In an interview with the Central News Agency, FSC Chairman Tseng Ming-chung said the company would need his agency's approval to install the ATMs and that the commission "would not likely" give it.
"If any Bitcoin ATM is illegally installed in Taiwan, the FSC will remove or demolish it," Tseng added.
Thailand – Thailand is ahead of the game when it comes to tackling Bitcoin; the country's Central Bank banned the digital currency way back in July. But according to one report, the bank does not actually have the authority to make this ruling and the currency is still in a legal grey zone.
India – In December India's central bank published an official warning to the public, cautioning users of virtual currencies about the "potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to."
Virtual currencies are also prone to losses due to hacking and malware attacks, the Reserve Bank of India said. The bank is currently looking at how India's laws may affect these currencies. According to the Financial Times, India has raided and closed down Bitcoin exchanges.
Germany – Germany's central bank, the Bundesbank, has also warned the public that bitcoins are "highly speculative," CoinDesk reported.
“There is not state guarantee for bitcoin and investors might lose all of their money. The Bundesbank is warning emphatically about these risks," Bundesbank board member Carl-Ludwig Thiele said.
Germany has however recognized Bitcoin as 'private money.'
Other European bodies that have issued warnings without any outright bans include the European Banking Authority which last month published a statement on the risks of Bitcoin trading. And although Norway's government has refused to recognize the cryptocurrency, it has taken measures to tax it as an asset.