Crypto payments abroad may be legal despite domestic bans in several countries

Several countries, including China, Indonesia, Russia, and Turkey, have imposed domestic bans on retail crypto payments, prohibiting their use for goods and services within their borders.

Despite these domestic bans, there is a legal distinction when it comes to using cryptocurrency for payments abroad. In many cases, countries do not explicitly restrict residents from using crypto to pay for services or goods outside their own jurisdiction.

Legal experts note that, generally, a country's laws apply primarily to activities within its own territory or to its citizens, but not to cross-border transactions unless specifically regulated.

“As a general rule, the laws of a country apply only to events occurring within that country or to its own citizens,” said Meric Paldimoglu, a lawyer in Turkey and managing partner of Paldimoglu Law Firm.

This creates a legal gray area: while domestic crypto payments are prohibited, making payments to foreign entities using crypto may not directly violate local laws, unless there are explicit extraterritorial restrictions.

Such legal overlaps and loopholes can attract scrutiny from global regulatory bodies, such as the Financial Action Task Force (FATF), which monitors anti-money laundering (AML) and combating the financing of terrorism (CFT) compliance.

While several countries maintain strict bans on domestic crypto payments, the use of cryptocurrency for payments abroad may remain legally permissible due to the territorial nature of most national laws. However, such practices exist in a regulatory gray area and may attract attention from both domestic authorities and international regulators, especially if linked to illicit activities.

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